Feb 07, 2012 NEW YORK (Dow Jones)--Copper futures ended slightly higher Tuesday, reversing earlier losses as signs Greece was nearing a debt-restructuring deal lifted the euro.
The most actively traded contract, for March delivery, rose 1.15 cents, or 0.3%, to settle at $3.8760 a pound on the Comex division of the New York Mercantile Exchange.
Anticipation of positive news from Athens buoyed the euro and helped copper prices recover in afternoon trading, Sucden Financial said in a note to clients.
Greek Prime Minister Lucas Papademos and the political leaders backing his interim government are set to meet later Tuesday to discuss cutbacks needed to win a new bailout deal and avoid a default. Papademos is expected to announce the details of the loan deal after the meeting.
Market participants have feared Greece's fiscal problems, if left unchecked, could spread to other members of the currency union and stall economic growth in the region. This would spell trouble for copper demand as the metal is widely used in construction and manufacturing and its prices are sensitive to shifts in economic outlook.
As the euro rallied on reports of progress in Greece, it raised the appeal of dollar-denominated copper futures by making those assets seem less expensive to investors using euros.
The euro was recently at $1.3241, up from lows of $1.3089.
Earlier in the day, downbeat data from Germany had put negative pressure on copper. Europe's largest economy's industrial production fell 2.9% in December from a month earlier. The data were seen as confirming that Europe's largest economy probably contracted in the fourth quarter of last year.
"When you do get numbers like this, it clearly impacts copper because it's highly dependent that we get global growth going," said Bill O'Neill, principal with Logic Advisors.
Copper settlements (ranges include electronic and pit trading):
Mar $3.8760; up 1.15 cents; Range $3.7940-$3.8810
May $3.8860; up 1.10 cents; Range $3.8065-$3.8890