Copper Treads Water as Investors Look to Greece

Jun 13, 2012 (Dow Jones) -- Copper futures remained in a holding pattern Wednesday, inching higher as market participants watch for news about the euro-zone-debt crisis and await the outcome of Greece's weekend elections.

The most actively traded contract, for July delivery, settled 0.40 cents, or 0.1%, higher at $3.3395 a pound on the Comex division of the New York Mercantile Exchange.

Copper prices were nearly unchanged for much of the day. Early in the session, weaker May U.S. retail-sales data stoked concerns about the economic recovery and pulled prices lower.

However, a stronger euro, which made a decisive advance above the psychologically important $1.25 level, gave copper a boost. Copper is traded in dollars and becomes cheaper for investors who use other currencies when the dollar weakens.

Market participants remain focused on Europe's battle to stem the spread of its debt crisis across the continent. Investors were left unimpressed with Spain's EUR100 billion ($126 billion) bailout on worries the country's banking sector will require a larger rescue package.

Traders await the results of Greece's upcoming election. The new government will need to back previously agreed-to austerity measures for Greece to keep receiving installments of its bailout package.

Ira Epstein, director of the Ira Epstein division at the Linn Group, expects metal prices will keep muddling between their June 4 lows and recent highs set Tuesday.

"I think the market is stuck in there for the near term, and that's why I'm calling them trendless," Mr. Epstein said.

Elsewhere, French bank BNP Paribas cut its forecast across all six base metals for 2012 and 2013. The bank expects copper prices to average $8,100 a metric ton, 6.1% lower than its previous forecast. BNP Paribas cut its third-quarter copper forecast by a full $1,000 a ton, or 11.4%, to $7,775 a ton.

"The risks to our forecasts are...tilted heavily to the downside, due above all to the great uncertainty about economic/financial prospects in Europe," said BNP Paribas analyst Stephen Briggs.

Copper settlements (ranges include electronic and pit trading):
Jun $3.3400; up 0.60 cents; Range $3.3250-$3.3525
Jul $3.3395; up 0.40 cents; Range $3.3185-$3.3695