US copper futures trimmed earlier gains to close with modest losses in thin dealings on Friday, as traders banked some profits ahead of the weekend while awaiting news on any strike developments from Chile, analysts said.
Copper for September delivery settled down 1.90 cents to $3.3835 a lb. on the New York Mercantile Exchange's Comex division, near the bottom of its $3.3740 to $3.4265 session range. Michael Gross, futures analyst with Liberty Trading Group in Florida, saw good support coming into the market, basis September copper, at $3.20.
"Copper seems to have some pretty good support right around $3.20. The market has approached those levels twice over the last six or seven weeks and both times we have rallied from there, so I think you have some pretty good commercial buying coming in at that level, as well as some fund buying too, since it seems like a pretty strong technical support level right now," Gross said.
Soon-to-be spot July copper fell 2.10 cents to $3.3820, while the rest of the board ended down from 0.60 to 2.10 cents. Final estimated copper futures volumes reached only 10,770 lots, against the 16,656 lots recorded on Thursday.
As of June 21, open interest in Comex copper futures rose 775 lots to 79,651 contracts. A month-over-month decline in Chinese copper imports failed to incite furthers sales pressure as the figures were in line with most analyst calculations.
It was a bit a negative sentiment, owing to the fact that London inventory numbers surged the other day, but I think people got over it pretty quickly," said Bart Melek, Global Commodity Strategist with BMO Nest Burns in Toronto. China's net imports of refined copper in the first five months of this year have already exceeded net imports for all of 2006, customs data showed on Friday, fuelling expectations that shipments will slow considerably in the third quarter of the year. Refined copper imports in may fell 37 percent from April to 116,749 tonnes, the lowest level since December, as record imports in 2007 created a glut that ruined importers' margins.
Ongoing labour disputes, especially at Chile's Codelco, and further drawdown in London copper stocks following on Thursday's hefty build overshadowed the somewhat bearish Chinese trade data, analysts said.
Subcontract workers at Chile's Codelco said on Friday they were continuing to plan a strike across the miner's five divisions, but declined to say when it would take place. Meanwhile, Strata Plc's Canadian copper refinery (CCR) was running at less than 30 percent capacity after 430 unionised workers walked off the job last week.
London Metal Exchange copper warehouse inventories fell by 1,775 tonnes to 117,825 tonnes on Friday, while Comex stocks declined 245 to 23,057 short tons on Thursday. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 4 percent to 96,025 tonnes in the week ended on Thursday. LME copper for delivery in three months settled down $10 to $7,435 a tonne from Thursday's close.