US copper futures fell before steadying on lower ground early on Wednesday after US industrial production data failed to surprise on the downside, providing mild support for prices, brokers said.
"The IP numbers are a little supportive," said Frank Lesh, broker and futures analyst with Future Path Trading in Chicago. "Nowadays, you just look to see how bad is it going to be, and when it's not as bad as expected, that's good."
Copper for March delivery was trading down 5.40 cents to $3.1875 a lb by 10:26 am EST (1526 GMT) on the New York Mercantile Exchange's Comex division, moving in an early session range between $3.1470 and $3.2335.
Futures volumes were estimated at 5,460 lots by 9 am US industrial production was flat in December versus expectations for 0.2 percent decline, a Federal Reserve report showed on Wednesday, but for last year as a whole it notched the weakest reading since 2003. Industrial production was up 2.1 percent for 2007, the slowest growth since a 1.1 percent gain in 2003.
Manufacturing is under close scrutiny as evidence gathers that the slumping US housing market has spread to other sectors, including consumer and business spending, and could tip the economy into recession. A sharp reversal in gold futures overnight and persistent worries about a possible recession in the United States were two main factors holding investment money back from entering the market.
"A big sell-off in the precious metals will certainly stop any copper rally," Lesh said, adding that the copper market will continue to be constrained by the economic outlook. In a separate report, the Consumer Price Index, the most broadly used gauge of inflation, rose 0.3 percent in December, slightly ahead of economists' forecasts for a 0.2 percent rise, the Labour Department report showed.