Comex copper prices ended slightly higher on Monday after seesawing in a narrow range, forming a sideways pattern on copper charts in an otherwise featureless day, traders said.
"The volume has been excruciatingly slow. I dont know if its summer doldrums or what it is. Premiums are hanging in there, but it's hard to say what the drag is," said one copper dealer.
Traders said Chinese players, who until recently seemed to have taken to the sidelines, were buyers overnight and in the New York session.
"We saw them buying this morning. They took us up to the high numbers and then we just drifted down. I think its lack of participation by the hedge funds more than anything does else does.
As a result people are quoting very wide spreads because threes no liquidity to get out of something when they trade it," a trader said.
Brokers said locals and a few small speculators, who took their cue from London copper, mostly traded on Monday's light volume in New York Active July copper ended 0.25 cent higher at $1.1975 per lb, in a range between $1.1830 and $1.20.
Spot June was up 0.20 cent at $1.1970 a lb. Only a few other contracts traded during the session and closed up 0.25 to 0.50 cent. Comex estimated final copper volume at 10,000 lots, similar to the 9,413 lots traded on Friday.
Open interest rose by 1,180 lots on Friday to 63,409. There were no new US economic releases on Monday. The next data of interest to copper traders should come on Thursday with the May durable goods orders and new home sales reports.
With little to influence copper prices in the meantime, traders said participants were sorting out copper direction without much conviction.
They said they expected copper to chop around as it consolidated in a sideways pattern, building a base for further gains in the longer term.
Some players said they think copper will consolidate in a mostly sideways range until the Federal Reserve meets June 29-30.
In the meantime, some traders said they expect July copper futures to trade roughly between $1.12 and $1.22 per lb.
Most players expect the Federal Reserve to raise interest rates at that meeting. At question is by how much and how often over the next few months. In his Weekly Metals Outlook Tim Evans at Pegasus said the CFTCs copper data confirmed how the prior weeks price drop was driven by fund long liquidation, but the small net long position left "tremendous potential for fresh buying."
"We also continue to view the reasons for the decline, slowing Chinese growth, fear of (higher) interest rates, and US dollar weakness, as consistent with a correction," Evans wrote.
He and others have noted that longer-term fundamentals, like rapidly declining inventories, strong housing data and robust industrial production, are all bullish signs for copper.
London Metal Exchange three-month copper finished with small gains at $2,624 per tonne at Monday's evening kerb close.
On Fridays finish was $2,615 a tonne.
On Mondays range ran from $2,604 to $2,648 a tonne. Comex is a division of the New York Mercantile Exchange.