COMEX copper futures settled near their session highs on Monday, albeit in thin dealings, as dealers noted the inactivity of the funds held the market in a quiet trading range.
"We were pretty steady all day. We did not see much of anything from the funds or large speculators like we did last week. It was mostly locals and small specs pushing it around today," said one COMEX floor dealer.
Benchmark September copper settled up 3.50 cents at $3.5825 a lb on the New York Mercantile Exchange's COMEX division, near the upper end of its $3.48 and $3.5950 trading band.
Initial resistance in September copper was pegged at around last week's high at around the $3.65 level, followed by $3.70. Support was seen at around the $3.25-$3.30 level, and then at $3.00.
Spot July rose 3.45 cents at $3.6770, after dealing between $3.5850 and $3.69.
The all-time COMEX record for spot copper was set at $4.16 a lb on May 11.
COMEX copper volume just before the close was estimated at 6,000 lots, compared with Friday's official count at 7,686 lots.
Traders expected choppy trading conditions in the near-term, as the market tried to find its footing above the $3.50 (a lb) level following a technical break to the upside last week.
"We should look to consolidate up here, but I think there is still room to the upside," said one. Edward Meir, metals analyst with Man Financial, also believed the market was still poised to eventually push higher due to the fact that higher interest rate worries may not weigh on the markets again until late August, which should allow some fund money to reenter without being derailed.
Fundamentally, production worries tied to labour issues at major copper mines in Chile, Zambia, and Mexico have been at the forefront of traders' minds at a time when inventories at exchange-monitored warehouses were at critically low levels.
Union workers at BHP Billiton's Escondida copper mine, the world's largest, could vote to strike at the end of July because the company's latest contract offer was too low.
Zambia's Konkola Copper Mines (KCM) is currently in talks with its unions, with both sides increasingly confident that they can avert a repeat of a 2005 strike that paralysed operations.
Meanwhile, Grupo Mexico's strike-plagued La Caridad copper mine could close within the next few weeks if talks with workers fail and depending on government approval, the company said on Friday.
Separately, the latest weekly Commitments of Traders data issued by the Commodity Futures Trading Commission showed the non-commercial short position in COMEX copper eased to 2,439 lots in the week ended July 7, compared with 3,710 lots in the week prior.
Looking at supply, London Metal Exchange stocks rose 2,625 tonnes to 92,225 tonnes on Monday, but were still at around two days global usage. COMEX inventories were unchanged at 7,796 short tons in Friday's daily data. LME three-months copper closed down $10 at $7,730 a tonne from Friday's kerb close.