US copper futures closed lower on Friday after a significant build in weekly Shanghai warehouse stocks reinforced fears of a demand slowdown in the world's top consumer of industrial metals. Copper for September delivery settled down 4.60 cents at $3.6690 a lb on the New York Mercantile Exchange's COMEX division. The session range was from $3.6505 to $3.70.
Technical support in September contract pegged at $3.65 to $3.63, followed by $3.50. Initial resistance seen at $3.80, followed by the psychological $4.00 level. By 1 pm EDT (1700 GMT), COMEX estimated volumes at 16,047 lots. Final volumes on Thursday totaled 25,167 lots.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 13 percent in the week ended Thursday. China's refined copper output rose 16.4 percent from a year earlier to 330,600 tonnes in June. Copper output in the first half of the year rose 19 percent to 1.82 million tonnes.
Global economic growth concerns and recent data out of China show potentially less demand for copper - Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.
London Metal Exchange (LME) inventories rose by 650 tonnes to 128,550 tonnes on Friday. COMEX copper stocks fell by 112 short tons to 7,857 short tons on Thursday. Inventories are down nearly 29 percent since the start of the month. Copper supported by potential supply disruption in South America.
Workers at Southern Copper's Cuajone mine and Ilo smelter in Peru, upset by a recent move by the company to try to fire union members, plan to go on strike next week. On the production front, Zambian authorities have granted a license for the new Mkushi copper project where production of copper concentrate is scheduled to start in mid-2010 and peak at 59,000 tonnes.
In Chile, mining giant Codelco said it may have found a new gold and copper deposit in its northern mining heartland. The copper market recorded a deficit of 159,000 tonnes in the first five months compared to a deficit of 42,000 tonnes for the January to April 2008 period - World Bureau of Metal Statistics. LME copper for delivery in three-months ended at $8,080 a tonne, down $80 from Thursday's close.