NEW YORK, Aug 16, 2010 (Dow Jones Commodities News via Comtex) --
Copper prices rose Monday, bolstered by a weaker dollar and a decline in inventories of the industrial metal.
Copper futures stayed range-bound and are expected to remain so on continued uncertainty about the global economy.
Recovering from last week's decline from nearly four-month highs, copper for December delivery settled 3.6 cents higher at $3.3085 a pound on the Comex division of the New York Mercantile Exchange.
Like many commodities, copper is denominated in dollars, so a weaker dollar gives foreign buyers more purchasing power. The red metal is particularly vulnerable to economic sentiment because it has a variety of applications in manufacturing, electronics and construction.
The declines in the dollar came as disappointing Japanese growth data and lackluster U.S. manufacturing and housing-market reports exacerbated concerns about the economic outlook.
The economic news wasn't all negative--while New York manufacturing activity grew at a slightly weaker-than-expected pace, employment conditions improved.
As Monday's economic news wasn't too negative, the markets are focusing on supply and demand fundamentals, which appear to be tightening as inventories continue to decline, said Bart Melek, global commodity strategist with BMO Capital Markets.
Inventories of copper stored in London Metal Exchange warehouses fell 1,850 metric tons Monday, leaving them at 406,700. The most recent Comex inventory data, released late Friday afternoon, showed that stockpiles at Comex warehouses were down 232 short tons at 97,387 short tons.
Sterling Smith, market analyst with Country Hedging Inc., said ongoing global concerns along with the typically quiet activity of August will likely keep copper prices range-bound for now, noting that news like the soft Japanese growth doesn't "provide food for the bulls."
Copper settlements (ranges include electronic and pit trading):
Sep $3.2880; up 3.6 cents; Range $3.2475-$3.3025
Dec $3.3085; up 3.6 cents; Range $3.2700-$3.3210