Apr 05, 2012 NEW YORK (Dow Jones)--Copper futures ticked higher on Thursday, as the previous day's selloff drew some buyers, but futures remained under pressure from European economic worries and diminished expectations for a Federal Reserve boost to the economy.
The most-actively traded copper contract, for May delivery, rose 0.5 cent, or 0.1%, to settle at $3.7955 a pound on the Comex division of the New York Mercantile Exchange.
Futures slumped 3.3% on Wednesday, the steepest one-day decline in 2012, on the view that the Federal Reserve was unlikely to take new steps soon to support the U.S. economy.
Some investors had added to their holdings of growth-sensitive assets such as copper in recent weeks on the view that the U.S. central bank would add to its accommodative monetary policies. Copper is used in a wide range of industrial applications, including automobiles, electronics and plumbing, making prices sensitive to shifts in the economic outlook.
"With enough economic hazard and a lack of QE coming, it doesn't leave a lot for the copper market to hang its hat on coming into the summer," said Sterling Smith, a market analyst with Country Hedging, referring to Federal Reserve asset purchases, or quantitative easing.
Other traders cashed out on the view that tremors in Spain's bond market were a sign of further weakness in Europe's economy. Those concerns mounted on Thursday as Spain's borrowing costs continued to climb.
But Wednesday's copper-price declines drew some bargain buyers.
"The return of the Chinese to the market overnight saw some small-scale and opportunistic buying emerge" in the copper and aluminum markets, said Leon Westgate, an analyst with Standard Bank, in a note. Chinese market participants were absent from the market during the first three days of the week for a public holiday.
Copper prices also were supported Thursday by an upbeat reading on the U.S. labor market. The U.S. economy's strength this year has surprised investors, lending support to copper and other commodities.
Trading on Comex and the London Metal Exchange will be closed Friday for the Good Friday holiday. The LME will remain shut on Monday.
Copper settlements (ranges include electronic and pit trading):
Apr $3.7915; up 0.60 cent; Range $3.7800-$3.8070
May $3.7955; up 0.50 cent; Range $3.7745-$3.8270