BASE METALS: Copper Futures Slip On Weaker Stocks, EU Fears

Sep 16, 2011 NEW YORK (Dow Jones)--Copper futures ended lower Friday as declines in equity markets and concerns about Europe's credit crisis pressured prices lower.

The most actively traded contract, for December delivery, fell 2.55 cents, or 0.6%, at $3.9315 a pound on the Comex division of the New York Mercantile Exchange. The contract is down 2% on the week.

Thinly traded September-delivery copper fell 2.50 cents, or 0.6%, to settle at $3.9200 a pound.

A negative turn in the Standard & Poor's Composite Index sent copper prices to negative territory as investors fled risky assets like commodities and stocks.

"There is really no big demand catalyst out there. The risks are on the downside," said Bart Melek, head of commodity strategy at TD Securities.

Copper prices spent the entire week below the psychologically-important $4 level and made a settlement low for the year Wednesday. The declines came as anxiety about the European sovereign debt crisis hit fever pitch. Some market participants were concerned that a government debt default would trigger a liquidity crunch in the region's banking system and halt business activity. The red metal is widely used in manufacturing and construction, and Europe is often second behind top copper consumer China in global copper demand.

Since then, a coordinated move by major central banks to shore up liquidity available to European banks eased market tension and helped copper pare some of its recent losses.

But traders remain on edge as euro-zone finance ministers met Friday for two days of talks in Poland. Copper prices briefly edged higher on hopes that the meeting would engender some decisive action among the group.

"Traders are having a tough time getting bullish unless we start seeing positive economic news," said Rob Kurzatkowski, senior commodity analyst with optionsXpress. "Traders would like to see a bit more positive news to push [copper] above $4," Kurzatkowski said.

Copper settlements (ranges include electronic and pit trading):
Sep $3.9200; down 2.50 cents; Range $3.9200-$3.9780
Dec $3.9315; down 2.55 cents; Range $3.9250-$3.9975