May 23, 2012 NEW YORK (Dow Jones)--Copper futures settled at a new 2012 low as growing uncertainty about Europe's way forward amid a complex debt problem triggered a rush to cash among market participants.

The most actively traded contract, for July delivery, fell 9.10 cents, or 2.6%, to settle at $3.3960 a pound on the Comex division of the New York Mercantile Exchange. This was the lowest price print of 2012, erasing all of copper's gains for the year.

Investors dumped assets with links to economic growth amid rising pessimism about Europe's ability to navigate its deepening sovereign debt crisis.

European Union leaders met in Brussels to discuss means of improving regional growth, the financial sector and how to keep Greece in the currency union even as it struggles to manage its massive debt load.

"The biggest worry is 'What is the plan out of Europe?' Do they have a plan if Greece pulls out? What's to say that Spain or Portugal or Ireland don't pull a Greece a week or two later?" said Bob Haberkorn, senior commodity broker with RJO Futures.

Copper prices were under pressure overnight from comments by former Greek Prime Minister Lucas Papademos that it is likely that preparations for a Greek euro exit are being considered. In his first interview since leaving office last week, Papademos told Dow Jones Newswires and The Wall Street Journal that dropping the euro would have "catastrophic" economic consequences for Greece and was an unlikely scenario, but one that cannot be excluded.

The euro slumped to a two-year low against the dollar, cutting into dollar-denominated copper prices. As the dollar rallies, it tends to discourage investors who use other currencies from buying dollar-denominated raw materials by making them seem more expensive.

"With what you see in the equity markets and world-wide conditions, it looks like copper demand will be weaker," said Haberkorn.

Copper, which goes into electrical wiring, computer chips, refrigerators and water pipes, is closely tied to economic outlook, and prices tend to slump when investors anticipate growth to slow.

Copper settlements (ranges include electronic and pit trading):
May $3.3980; down 8.95 cents; Range $3.3920-$3.4700
Jul $3.3960; down 9.10 cents; Range $3.3865-$3.4775