US copper futures finished sharply lower on Friday, sliding to a nine-day low after a surge in London Metal Exchange and weekly Shanghai Exchange warehouse stocks spooked investors, many of whom had already begun exiting positions this week, traders said.
Copper for July delivery ended with losses of 7.10 cent at $3.7165 a lb on the Comex metals division of the New York Mercantile Exchange. July futures slid to a 9-day low at $3.6775 a lb, leaving support at the May 1 low of $3.6675 a lb intact. London Metal Exchange coppers warehouse stocks surged 11,150 tonnes on Friday to 121,275 tonnes.
Comex warehouse copper stocks stood even at 10,827 short tons on Thursday. Shanghai Futures exchange copper inventories jumped 10 percent to 51,119 tonnes in the week to Thursday.
Talk circulated the Shanghai market that South Korean LME warehouses would also soon see around 10,000 tonnes of copper deliveries from China. Analysts said much of the material causing the stock surge came from China, and is often followed by additional rises in copper stocks.
Traders said Chinese buyers have been absent from the market of late. Some players were already in the process this week of unwinding long copper positions hastily taken out on Monday's unusual spike up to the $4.2605 a lb record high. A breach of July copper's March low at $3.6070 per lb would open up the downside to a much steeper decline.
Comex estimated final copper volume at 16,299 lots compared with Thursday's total volume of 14,749 lots. Open interest was down 783 lots at 98,360 contracts as of May 8. LME copper for delivery in three months finished on Friday at $8,100 per tonne, down from $8,300 per tonne on Thursday.
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