US copper futures lost over 2 percent of their value on Friday as the dollar regained its upside momentum against the euro, sparking profit-taking losses in the broader commodity complex, dealers said. Copper for September delivery lost 7.35 cents, or 2.1 percent, by the close at $3.4725 a lb on the New York Mercantile Exchange's COMEX division.
The session range was from $3.4475 to $3.5580. By 1 pm EDT (1700 GMT), COMEX estimated futures volume at 17,604 lots. Final volumes on Thursday totalled 22,156 lots. Open interest in the market fell by 1,181 lots to 92,093 open contracts as of August 21. "It's profit-taking back into the dollar today." - Zachary Oxman, senior trader with Wisdom Financial in Newport Beach, California.
On Thursday, the benchmark September contract rallied as much as 16.55 cents, or nearly 5 percent, to $3.5625 - its highest level since August 4. The dollar recovered from the previous session's sharp losses, buoyed by a pullback in the price of crude oil, a stronger tone on Wall Street, and an ailing pound after growth data strongly suggested a recession in Britain.
In afternoon trade in New York, the euro was down 0.7 percent at $1.4794, edging towards a six-month low hit earlier this week at $1.4631, according to Reuters data. A stronger dollar typically weighs on dollar-denominated copper by making it more expensive for non-US investors. Losses in crude oil lead the broader metals complex lower - analyst.
"We're just living on the back of crude right now. The euro and the crude are working hand-in-hand with each other, and we are predominantly following." - Frank McGhee, head metals trader with Integrated Brokerage Services LLC in Chicago. Crude oil prices fell more than $6 on Friday in the biggest one-day percentage slide since 2004 as dealers turned their focus to rising supply levels and weakening global demand.
Fundamentally, uncertainties about global demand, highlighted by increasing inventories in London warehouses and still-sluggish Chinese appetite for the metal, continue to weigh on sentiment. London Metal Exchange copper warehouse stocks jumped 7,275 tonnes to 163,800 tonnes on Friday, their highest level in six months. COMEX copper stocks were flat at 5,390 short tons on Thursday.
In Shanghai, stocks fell in line with expectations, down 12 percent to 21,796 tonnes. Some market players fear China's weaker demand trend may persist after data showed imports of refined copper during the first seven months of the year decline by 22 percent year-on-year to 775,089 tonnes.
Implied copper demand remained anemic into July, rising just 2 percent from June, while year-to-date growth of only 5.8 percent, is much lower than expectations at the start of the year. LME copper for delivery in three-months settled at $7,660 a tonne, down $205 from Thursday's kerb close.
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