Metals News
Copper Futures Slip as Investors Capture Gains
industry news
08:39AM
Jul 3,2012
Source:SMM

Jul 02, 2012 (Dow Jones) NEW YORK--Copper futures retreated in step with the euro Monday as some investors moved to lock in recent gains while others pared holdings on weaker manufacturing data from Europe and China.

The most actively traded contract, for September delivery, was recently down 2.15 cents, or 0.6%, at $3.4750 a pound on the Comex division of the New York Mercantile Exchange.

Copper futures had surged 4.9% to settle at a five-week high Friday, as surprise progress in Europe's battle to stem the spread of its debt crisis bolstered investor confidence. Those gains were rolled back slightly Monday, as some investors moved to cash-in recent profits.

"Given the extent of the move higher, we are seeing a modest retracement set in [Monday], with practically all markets lower right now," said Edward Meir, senior commodity analyst with INTL FCStone, in a note to clients.

Copper, which is priced in dollars, faced additional pressure from a weaker euro, which made the metal more expensive for investors who use the single European currency.

The euro was recently at $1.2600, down from $1.2681 earlier.

Copper prices also declined on data showing slower manufacturing activity, and hence lower demand, in two of the world's largest copper consuming regions.

China, the world's largest consumer of the industrial metal, reported its official purchasing managers index fell to 50.2 in June from 50.4 in May. The report beat forecasts of 49.8. A reading above 50 indicates manufacturing activity is expanding.

The euro-zone purchasing managers' index held at 45.1 in June, unchanged from May, signaling that factory activity in the region continued to decline last month. As a region, Europe is the world's second largest copper consumer behind China.

Traders now shift their sights to the upcoming European Central Bank policy setting meeting on Thursday, with hopes rising that benchmark interest rates could be lowered.

"The grim statistics will likely increase the odds that the ECB may cut rates at its next meeting on Thursday, as it will not have inflation to worry about," Mr. Meir said.

 

Comex copper Monday
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