NEW YORK, Jun 16, 2010 (Dow Jones Commodities News via Comtex) -- Weaker-than-expected U.S. housing data and fresh European economic worries are pressuring copper futures Wednesday.
The most-actively traded September contract is down 2.7 cents, or 0.9%, at $2.9970 a pound on the Comex division of the New York Mercantile Exchange.
"The demand picture is not that great," said Dan Cook, Chicago-based senior market analyst with brokerage firm IG Markets, which has its headquarters in London.
Positive economic sentiment is starting to fray following several days of promising data and comments from financial leaders that have sent copper above the psychologically important $3 mark.
It was back below that level Wednesday after U.S. data showed that housing starts dropped 10.0% in May after the government ended a homebuyer tax credit and permits for new construction fell. Economists had expected overall housing starts to drop 5.2%.
The housing market is key to copper demand because the metal is widely used for piping and wiring.
It is also used in automobiles, electronics and appliances. As a result, worries about global economic growth being clipped by European debt problems--particularly in Greece, Spain, Portugal and Hungary--have kept copper market participants wary.
Fresh worries about Spain surfaced after the government denied again that a liquidity package for the country is being prepared by the European Union or International Monetary Fund. That has also pressured the euro and supported the dollar, which in turn weighs on copper prices by making the dollar-denominated metal more expensive for buyers using other currencies.
In another indicator of demand, inventories of copper stored in London Metal Exchange warehouses fell 2,375 metric tons Wednesday, leaving them at 459,150. The most recent Comex inventory data, released late Tuesday afternoon, were unchanged at 101,925 short tons.