Dec 19, 2011 NEW YORK (Dow Jones)--Copper prices sagged Monday amid weak economic data from Europe as well as downbeat comments by the European Central Bank.
The most active contract, for March delivery, fell 2.25 cents, or 0.7%, to settle at $3.3085 a pound on the Comex division of the New York Mercantile Exchange.
Thinly traded December-delivery copper fell 2.30 cents, or 0.7%, to settle at $3.3010 a pound.
The European Central Bank said there has been a substantial increase in risks to the stability of the euro-zone's financial system in the second half of this year to their worst level since the collapse of Lehman Brothers Inc. in 2008. The spread of sovereign debt problems across borders and through the banking system, as well as the region's clumsy approach to resolving these issues, has added to these concerns.
"The possibility that more euro area sovereigns will, as a consequence, face difficulties in refinancing their debt remains among the most pressing risks to euro area financial stability," the central bank said in its twice-yearly financial Stability Report.
Europe's debt problems have been a major driver behind copper prices in recent months, as the escalating sovereign debt crisis damped the outlook for economic activity in the region. Europe is a major global consumer of copper and market participants worry that its financial and economic problems will contributed to lower demand for industrial metals.
Copper prices faced more pressure after Eurostat reported that euro-zone construction activity fell 1.4% in October from September, the third straight monthly drop and down 2.8% from the same month last year.
The data are "more evidence that the euro zone economy is losing momentum," traders at Sucden Financial in London said in a note to clients.
Copper prices are sensitive to slowdowns in construction as the metal is widely used for electrical wiring and water plumbing.
Copper settlements (ranges include electronic and pit trading):
Dec $3.3010; down 2.30 cents; Range $3.2790-$3.3210
Mar $3.3085; down 2.25 cents; Range $3.2625-$3.3565