COMEX copper futures slid to one-week lows at the open Wednesday to line up with a decline in London prices, which got hit by a massive rise in exchange warehouse inventories overnight, then fell further when stop-loss orders were triggered, traders said.
"They started off selling on the big warehouse increase. That got the ball rolling. The dollar started to pick up and this thing started feeding on itself. A lot of stop-loss selling and a lot of technical selling," a COMEX broker said.
Participants overlooked dollar weakness on Wednesday to focus instead on the big increase in London Metal Exchange warehouse inventories, which surged by more than 35 percent overnight.
Rapid and consistent draw down in both COMEX and LME warehouse inventories have served as a firm prop under copper prices for months as players worried that dwindling supplies will one day be depleted.
Active September copper dropped 4.85 cents to $1.2590 a lb on the New York Mercantile Exchanges COMEX division. It traded down to $1.25 from the high at $1.3080 a lb.