Comex Copper Falls On Euro Worry; Rises 6% This Week

Industry News 09:03:27AM Jan 16, 2012 Source:SMM

Jan 13, 2012 NEW YORK (Dow Jones)--Copper futures slipped on Friday, as investors cooled to the industrial metal on renewed worries about the health of the euro zone after reports EU states could face a credit-rating downgrade by the end of the day.

The most actively traded copper contract, for March delivery, fell 1.2 cents, or 0.3%, to settle at $3.637 pound on the Comex division of the New York Mercantile Exchange.

Copper's decline on Friday tracked losses in the euro after reports that several euro-zone countries could face an "imminent" downgrade by ratings firm Standard & Poor's. The firm had placed 15 euro-zone members on negative credit watch on Dec. 5 because of the ongoing debt crisis.

French officials said the government had been notified that S&P would cut its credit rating, a blow to hopes that the country would hold its triple-A rating and help keep borrowing costs for the euro-zone bailout fund low.

Word of the impending downgrade sent "the euro, equities and metals heading lower," traders with RBC Capital Markets said in a note. Metals next week could come under more pressure "from confirmation of the downgrades likely to be announced in the coming hours."

A stronger dollar can hit dollar-denominated copper by making the futures appear more expensive for buyers using other currencies. Copper has an added tie to Europe's debt struggle, as a credit crunch there could curb global demand for the metal in construction and manufacturing.

Copper futures had settled at their highest point since late October on Thursday, as hopes for growing copper demand in China and the U.S. outweighed lingering worries about the financial health of the euro zone.

Metals "led the pack" in rising earlier this week, said Adam Klopfenstein, a market strategist with Archer Financial Services. "That was a knee-jerk reaction as people started to jump on good news. That's going to cause people to reverse course in a fast way after these (euro-zone) headlines."

During the week, futures rose 6%.

Goldman Sachs on Friday reiterated its bullish view on copper prices, citing its expectations that top copper consumer China will ease its tight-credit policy and that the pace of copper-intensive construction activity there would hold up well.

The investment bank forecasts benchmark copper on the London Metal Exchange to reach $9,000 a metric ton in six months, or $4.08 a pound.

Copper settlements (ranges include electronic and pit trading):
Jan $3.6320; down 1.2 cents; Range $3.5775-$3.6320
Mar $3.6370; down 1.2 cents; Range $3.5790-$3.6890

 

Key Words:  Comex copper  

Comex Copper Falls On Euro Worry; Rises 6% This Week

Industry News 09:03:27AM Jan 16, 2012 Source:SMM

Jan 13, 2012 NEW YORK (Dow Jones)--Copper futures slipped on Friday, as investors cooled to the industrial metal on renewed worries about the health of the euro zone after reports EU states could face a credit-rating downgrade by the end of the day.

The most actively traded copper contract, for March delivery, fell 1.2 cents, or 0.3%, to settle at $3.637 pound on the Comex division of the New York Mercantile Exchange.

Copper's decline on Friday tracked losses in the euro after reports that several euro-zone countries could face an "imminent" downgrade by ratings firm Standard & Poor's. The firm had placed 15 euro-zone members on negative credit watch on Dec. 5 because of the ongoing debt crisis.

French officials said the government had been notified that S&P would cut its credit rating, a blow to hopes that the country would hold its triple-A rating and help keep borrowing costs for the euro-zone bailout fund low.

Word of the impending downgrade sent "the euro, equities and metals heading lower," traders with RBC Capital Markets said in a note. Metals next week could come under more pressure "from confirmation of the downgrades likely to be announced in the coming hours."

A stronger dollar can hit dollar-denominated copper by making the futures appear more expensive for buyers using other currencies. Copper has an added tie to Europe's debt struggle, as a credit crunch there could curb global demand for the metal in construction and manufacturing.

Copper futures had settled at their highest point since late October on Thursday, as hopes for growing copper demand in China and the U.S. outweighed lingering worries about the financial health of the euro zone.

Metals "led the pack" in rising earlier this week, said Adam Klopfenstein, a market strategist with Archer Financial Services. "That was a knee-jerk reaction as people started to jump on good news. That's going to cause people to reverse course in a fast way after these (euro-zone) headlines."

During the week, futures rose 6%.

Goldman Sachs on Friday reiterated its bullish view on copper prices, citing its expectations that top copper consumer China will ease its tight-credit policy and that the pace of copper-intensive construction activity there would hold up well.

The investment bank forecasts benchmark copper on the London Metal Exchange to reach $9,000 a metric ton in six months, or $4.08 a pound.

Copper settlements (ranges include electronic and pit trading):
Jan $3.6320; down 1.2 cents; Range $3.5775-$3.6320
Mar $3.6370; down 1.2 cents; Range $3.5790-$3.6890

 

Key Words:  Comex copper