US copper futures surged to prices unseen in 11-months after robust US consumer spending data suggested demand for the metal might increase, then closed off that peak at still-lofty levels as many players squared their books at month's end, analysts said.
Benchmark copper for December delivery settled 7.85 cents, or 2.73 percent, higher at $2.9505 a lb on the New York Mercantile Exchange's COMEX division. Range reached up to $2.9895, last seen on September 26, from a higher low at $2.8860 a lb. September futures added 7.45 cents, up 2.62 percent, to close at $2.9230. COMEX estimated final copper volume at 31,859 lots, up from Thursday's official count of 30,261 lots.
Open interest went up 1,099 lots to 119,566 contracts open as of August 27. Copper pulled off early highs when August consumer sentiment data slipped below the July reading - traders. Reuters/University of Michigan Surveys of Consumers' final August consumer sentiment fell to 65.7 from July's final reading of 66.0.
Copper continued to hold onto multi-month highs despite pullbacks in US equity markets. Technical factors rolling September into December contracts and other month-end squaring took precedence - analysts. London markets will be closed Monday for a holiday and many participants sought to finish business for August on Friday - traders.
"Today it was all month-end business. We were very busy with month-end averaging, September averaging, unwinding September positions, and generally cleaning up books," said Mo Ahmadzadeh, president of Mitsui Bussan Commodities (USA) Inc in New York. Most metals, along with oil prices, also settled strong amid optimism that the recession is ending. Earlier, a healthy US consumer spending series pushed copper up to highs last seen in late September 2008 - traders.
July US consumer spending rose as forecast, lifted by the government's "cash-for-clunkers" program that fuelled demand for autos. The Commerce Department said spending rose 0.2 percent after increasing by a revised 0.6 percent in June, previously reported as a 0.4 percent gain. The headline number was in line with an average of analysts forecasts.
"It looks like we ended the quarter a little bit higher than we thought, and this is three straight months of increases in inflation-adjusted consumer spending. So, I think that puts us in pretty good stead for an upturn in consumer spending in the third quarter," said David Resler, chief economist at Nomura Securities International in New York.
London Metal Exchange (LME) warehouse stocks climbed 1,375 tonnes to 298,925 tonnes on Friday. COMEX copper warehouse stocks rose 111 short tons to 52,981 short tons as of Thursday. LME copper for three-months delivery closed the Friday kerb at $6,475 a tonne from $6,275 a tonne at Thursday's close. Earlier, it hit an 11-month high at $6,549.