Economic Data Pushes Comex Copper To 4-Week Low

Nov 23, 2011 NEW YORK (Dow Jones)--Copper futures declined Wednesday as weak economic data from key consuming countries stoked worries about future demand for the industrial metal.

The most actively traded contract, for December delivery, fell 5.40 cents, or 1.6%, to settle at $3.2790 a pound on the Comex division of the New York Mercantile exchange.

Thinly traded November copper fell 5.30 cents, or 1.6%, to settle at $3.2775 a pound. The November contract's last trading day will be Nov. 28.

Copper prices staggered to a four-week low after a one-two punch from data showing weaker purchases by Chinese manufacturers and a slowdown in U.S. durable goods orders. The industrial metal is widely used in manufacturing and is a key material in making machinery and electrical equipment.

Copper is "scared to death" about weaker industrial demand prospects, said Ira Epstein, director of the Ira Epstein division of the Linn Group. "Is industry going to hold up, or not?" is the key question for copper traders, as prices hinge on the metal's wide use by the sector, he added.

Traders should take heart in copper's resilience, however, as prices are still trading above $3 a pound, Epstein said. "[Copper] is trading in that $3.30 area, the area it's been paying attention to" even against the backdrop of the ongoing euro-zone debt problems.

Copper futures faced added pressure from a stronger dollar, which raced higher against the euro after Germany failed to sell the full amount of debt it had prepared for a debt auction. Investors shied away from the euro amid renewed concerns that the euro zone's debt crisis is infecting the region's largest economy.

The ICE Dollar Index was recently up 1.2% at 79.137. Copper is priced in dollars and appears more expensive to investors who use other currencies when the dollar strengthens.

Meanwhile, the International Copper Study Group said the global copper market faced a shortfall of 45,000 metric tons in August as strong Chinese consumption offset seasonally weak demand in other regions. The ICSG estimated a copper production shortfall of 161,000 metric tons over the first eight months of the year, down from a deficit of 339,000 metric tons in the same period of 2010, the ICSG said.

Copper settlements (ranges include electronic and pit trading):
Nov $3.2775; down 5.30 cents; Range $3.2525-$3.2775
Dec $3.2790; down 5.40 cents; Range $3.2340-$3.3670