Metals News
Copper Extends Losing Streak On Greece Worry
industry news
May 17,2012

May 16, 2012 NEW YORK (Dow Jones)--Copper futures retreated for a fourth consecutive session Wednesday as investors dumped the industrial metal on worries about Europe and the resulting clamor for the U.S. dollar.

The most actively traded copper contract, for July delivery, fell 3.95 cents, or 1.1%, to settle at $3.478 a pound on the Comex division of the New York Mercantile Exchange, the lowest price since January.

Copper, widely used in construction and manufacturing, has struggled in recent weeks as worries escalate about a potential worsening of the financial stress in Europe. Investors seeking a safe harbor have flocked to the U.S. dollar, dragging on dollar-denominated copper by making the futures appear more expensive for buyers using other currencies.

The ICE U.S. Dollar Index, which tracks the currency against those of some major U.S. trading partners, on Wednesday touched its highest level since mid-January.

Greece is seen as increasingly likely to exit the euro zone after its main political parties were rebuked in an election and efforts to form a coalition government afterward failed. A Greek exit could ramp up the pressure on banks in larger debt-laden countries such as Italy and Spain.

The euro zone is the second largest copper consumer behind China, and a financial crisis there could slam the industrial economy and disrupt global trade.

"Copper is a bellwether for economic growth, and it's essentially bearish right now," said Ralph Preston, a market analyst with Heritage West Financial, highlighting worries about growth both in Europe and China.

Comex copper futures have settled lower during nine of the last 11 trading sessions.

Copper futures initially pared their losses after a batch of U.S. economic data showed improvement in the housing and industrial sectors in April, but they couldn't hold those gains.

The U.S. economy had a surprisingly strong start to the year, helping to support prices of copper and other growth-sensitive commodities. But that optimism faded as growth in the U.S. seemed to slow and worries about a slowdown in China mounted.

"The base metals seem to be undergoing a bit of a reality check," said Leon Westgate, an analyst with Standard Bank, in a note.

Copper settlements (ranges include electronic and pit trading):
May $3.4850; down 3.70 cents; Range $3.4590-$3.5190
Jul $3.4780; down 3.95 cents; Range $3.4620-$3.5090


copper Wednesday; losing streak
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