Sep 20, 2011 NEW YORK (Dow Jones)--Copper futures eased Tuesday, setting new lows for 2011 as a reading on the U.S. housing market came in weaker than expected and the International Monetary Fund cut its outlook for global growth.
The most actively traded copper contract, for December delivery, was recently down 0.95 cent, or 0.3%, at $3.773 a pound on the Comex division of the New York Mercantile Exchange. Futures earlier slipped as low as $3.7420 a pound, the lowest intraday price since November 2010.
U.S. home construction in August fell to its lowest level in three months as the industry continued to drag on the world's largest economy. Construction of homes and apartments on the month fell 5% from July, to 571,000, the Commerce Department said Tuesday. Economists had expected housing starts to stand at 590,000 on the month.
Copper is sensitive to such data because of its widespread uses in plumbing and wiring in home construction.
"The copper market is not drawing any good news here," said Sterling Smith, a market analyst with Country Hedging. Even if the housing starts figure had met analyst views, "expectations were so low it wouldn't really be good news."
Copper futures plunged Monday, with the most-active contract settling at the lowest level since October 2010 as worries about euro-zone debt and a potential credit crunch sent traders cashing out of the growth-sensitive commodity. Traders worried that a slowdown in the developed world would slash copper demand despite signs of steady demand from top consumer China.
Sentiment was also hit Tuesday as the International Monetary Fund cut its 2012 global growth forecast to 4%, from previous expectations of 4.5% growth. The IMF said U.S. and Europe are likely to see deep recessions without swift policy action from world governments.