US copper futures drifted to a softer close on Thursday as concerns about the red metal's future demand prospects capped earlier dollar-inspired gains, traders said.
"It's curious to see the copper fail to advance with the rest of the metals. If I had to put my finger on it, I would have to say the housing data probably suppressed the bulls a little bit," said one trader, referring to data showing US home foreclosure filings in February jumped 60 percent year-over-year - another sign that the housing sector was far from hitting bottom.
Copper for May delivery ended down 1.20 cents at $3.8250 a lb on the New York Mercantile Exchange's Comex division, after dealing in a session range between $3.7870 and $3.8640.
By noon, futures volumes were estimated at a modest 6,608 lots. Final volumes on Wednesday totalled 10,043 lots. Open interest in the market rose by 633 lots to 103,740 contracts open as of March 12. Copper futures clawed higher in the first half of the day as the US dollar plumbed new lows at $1.5624 per euro and gold traded at $1,000 an ounce for the first time.
Those worries were now seen rearing their heads back into the copper market, which up until now, has been largely been unaffected. Chinese metal fabricators are starting to feel the pinch from a slowdown in US export orders, indicating that internal demand from the Asian giant may not be able to sustain the metals price boom.
Auto part makers to tube manufacturers in China are reporting lacklustre order books going into the second half of the year. Together with efforts by Beijing to curb economic expansion, analysts fear that industrial commodities will be hit by a double whammy - a US recession and moderating growth in Asia.
Comments
Comments are closed.