May 10, 2012 NEW YORK (Dow Jones)--Copper futures settled higher Thursday, snapping a two-day losing streak, after Europe's rescue fund said it would disburse pre-agreed funding to Greece and help the Mediterranean nation avoid default.
The most actively traded contract, for July delivery, rose 3.10 cents, or 0.9%, to settle at $3.6905 a pound on the Comex division of the New York Mercantile Exchange.
The European Financial Stability Facility paid Greece Thursday the EUR4.2 billion ($5.44 billion) in rescue financing agreed under the country's second bailout package. The funds are sufficient to last Greece until the end of June, when EUR1 billion in further installments will be reviewed based on Greece's needs.
"It's a confirmation and it alleviates the concern," said Bill O'Neill, principal with Logic Advisors. "Things in Greece are a little less frenetic than they were a few days ago."
Copper prices had sank to a two-week low Wednesday as worries about Greece's political upheaval and debt problems intensified. Investors had slashed copper holdings on worries that Greece could spiral into a messy default without EFSF funding.
Copper is widely used in everyday goods like music players, cars and washing machines, and demand for copper tends to decline when economic growth slows down.
Signs of improvement in Europe eclipsed mixed economic data from China, the world's largest consumer of copper.
China's imports of copper, copper alloy and semifinished products fell 19% to 375,258 metric tons in April from March. April imports were up 43% from the same month last year.
"The Chinese trade data released this morning continues to reflect poorly on the state of the global economy," Walter de Wet, head of commodity strategy with Standard Bank.
The euro moved higher against the dollar, further boosting copper's rally. Copper futures are denominated in dollars and appear less expensive to investors holding other currencies.
Copper settlements (ranges include electronic and pit trading):
May $3.6915; up 2.20 cents; Range $3.6610-$3.7200
Jul $3.6905; up 3.10 cents; Range $3.6435-$3.7135