NEW YORK, Aug 25, 2010 (Dow Jones Commodities News via Comtex) --
Copper futures fell Wednesday under pressure from disappointing reports on U.S. new home sales and durable goods orders that cast doubt on the economic recovery and demand for the industrial metal.
The most actively traded copper contract, for December delivery, declined 3.05 cents, or 0.9%, to settle at $3.2315 a pound on the Comex division of the New York Mercantile Exchange.
Recent data have weighed on the metal, throwing into question the health of the economic recovery, and by extension demand for the industrial metal. Copper prices are particularly linked to the performance of the economy because the metal is widely used for wiring, piping and sheeting in construction, appliances, electronics and automobiles.
"The news that we've been getting on the U.S. housing market, which is a big user of copper, isn't good," said Craig Ross, vice president of Chicago-based brokerage ApexFutures.com. "When we get reports like this it's going to take a hit."
On Wednesday, a report showed new home sales in July decreased 12.4% from the previous month to a seasonally adjusted annual rate of 276,000. Economists had estimated sales would climb by 0.9% to 333,000.
Separate news showed demand for U.S. manufactured durable goods increased far less than expected in July, as large gains in civilian airplanes and cars were offset by declines outside the transportation sector. Durable-goods orders rose 0.3% to a seasonally adjusted $193.02 billion. Economists had expected a 2.8% gain.
Other housing data, out Tuesday, surprised the market by its weakness and also pressured copper. Existing home sales plunged 27% to their lowest level in 15 years in July.
"Copper is back into a bearish pattern," said Bob Haberkorn, senior market strategist with Lind-Waldock in Chicago. He said the metal could be headed back to the $3.10 area.
Inventories of copper stored in London Metal Exchange warehouses fell 1,400 metric tons Wednesday, leaving them at 402,425
The most recent Comex inventory data, released late Tuesday afternoon, were down 86 short tons at 96,156 short tons.
Copper settlements (ranges include electronic and pit trading):
Sep $3.2110; down 3.00 cents; Range $3.1775-$3.2590
Dec $3.2315; down 3.05 cents; Range $3.2000-$3.2800