Home / Metal News / Copper / BASE METALS: Comex Copper Ends Higher On EU Deal, US Hopes
BASE METALS: Comex Copper Ends Higher On EU Deal, US Hopes
Jul 25,2011 09:56CST
industry news
--Comex Sept copper ends up 2.65 cents, or 0.6%, at $4.4100/lb.

Jul 22, 2011 (Dow Jones Commodities News via Comtex) -- --Comex Sept copper ends up 2.65 cents, or 0.6%, at $4.4100/lb.

--EU deal emboldens traders, but US debt ceiling talks temper gains

--Supply disruption from 24-hour strike at world's largest copper mine, Chile's Escondida, adds support

By Tatyana Shumsky

NEW YORK (Dow Jones)--Copper inched higher Friday as supply disruptions in Chile and Europe's debt deal boosted sentiment, but slow progress in Washington tempered gains.

The most actively traded contract, for September delivery, gained 2.65 cents, or 0.6%, to settle at $4.4100 a pound on the Comex division of the New York Mercantile Exchange.

Thinly traded July-delivery copper rallied 2.70 cents, or 0.6%, to settle at $4.4045 a pound.

The Senate rejected a House Republican proposal to "cut, cap and balance" the budget in a symbolic gesture that paves the way for a bipartisan agreement to raise the national debt ceiling and avoid a U.S. default. However, a comprehensive proposal has yet to be unveiled as President Barack Obama and House Speaker John Boehner continue to negotiate a deal.

"There seems to be a feeling that we're going to have a debt deal coming, though that could change quickly," said Frank Lesh, broker and futures analyst with FuturePath Trading.

The incremental progress in Washington has kept copper's gain in check, as traders balanced optimism with concerns that the Aug. 2 deadline for the debt-ceiling deal is drawing near.

Earlier in the day, copper prices climbed on sustained relief over a second bailout deal for Greece. European leaders agreed Thursday to extend Greece a EUR159 billion aid package, including official loans and private-sector participation. The new accord also revamped the European Financial Stability Facility, a EUR440 billion bailout fund which will have more flexibility in how it participates in the sovereign debt markets.

The deal worked to negate months of uncertainty over Europe's deepening sovereign debt crisis, giving investors hope that focus can now shift to economic growth.

"Even though there are some fears in the market, it looks like the money still believes that the economic recovery is intact," said Adam Klopfenstein, senior market strategist with Lind-Waldock.

Copper is considered a bellwether of economic growth, as the red metal is widely used in construction and manufacturing, leaving its prices sensitive to shifts in growth rates.

Work at the world's largest copper mine, Chile's Escondida, stopped for 24 hours Friday due to a unionized labor strike. Escondida stands to lose around 3,000 metric tons of copper production, worth around $30 million.

The strike joins a rising chorus of supply disruptions across the copper industry, as severe cold weather in Northern Chile has pressured operations at several mines. Chile supplies about 30% of the world's copper and is the world's largest producer of the red metal.

Earlier this month, a general strike at Chilean state copper company Corporacion Nacional del Cobre saw the company lose around $41 million on 4,900 metric tons of lost copper production.

A similar strike at Freeport McMoRan Copper & Gold Inc.'s (FCX) Grasberg operations in Indonesia also crimped output.

Copper settlements (ranges include electronic and pit trading):
Jul $4.4045; up 2.70 cents; Range $4.3750-$4.4045
Sep $4.4100; up 2.65 cents; Range $4.3750-$4.4260



For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news