Comex Copper Rises Ahead Of Fed; Pares Gains After-Shanghai Metals Market

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Comex Copper Rises Ahead Of Fed; Pares Gains After

Industry News 09:39:20AM Jul 12, 2012 Source:SMM

Jul 11, 2012 (Dow Jones) NEW YORK--Copper futures rose Wednesday ahead of the release of minutes from the Federal Reserve's latest policy meeting, but those gains were pared after the settlement as traders didn't see any hints of new stimulus from the U.S. central bank.

During the regular session, copper for September delivery, the most-actively traded contract, rose 4.95 cents, or 1.5%, to settle at $3.4475 a pound on the Comex division of the New York Mercantile Exchange.

On Tuesday, futures had settled at a one-week low and traders were reluctant to bet on fresh losses on Wednesday in case the Federal Reserve hinted at new measures to prop up the U.S. economy.

But details of the central bank's deliberations last month, released at 2:00 p.m. EDT, didn't feature any obvious hints that it was likely to act soon. This weighed on copper and other growth-sensitive assets, with copper futures paring their gains.

"I can't find anybody who thinks QE3 is right around the corner at this point," Frank Lesh, a broker with FuturePath Trading, said, referring to a potential third round of Federal Reserve bond buying.

In post-settlement economic trading, copper for September delivery recently traded 0.4% higher, at $3.414 a pound.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries, including automobiles, construction and general manufacturing. Futures have gained in recent months when traders were anticipating growth-boosting measures from the Fed.

"I don't see any reason why copper's going to trade higher," said Bob Haberkorn, senior commodities broker with RJO Futures. "Copper is stuck in the mud right now."

Copper's losses on Tuesday came after news that China's copper imports slumped in May from the previous month. China, the world's top copper consumer, has seen slowing growth this year as its export markets have weakened under the weight of Europe's banking crisis.

Credit Suisse and Royal Bank of Scotland Wednesday joined a growing number of banks in downgrading their copper-price forecasts amid mounting concerns about the pace of global growth.

"The European wrecking ball has once again derailed the global recovery," Ric Deverell, director of commodities research at Credit Suisse, said in a note.

Credit Suisse now sees copper averaging $3.51 a pound this year, down 14% from its previous outlook. RBS slashed its average price view by 4%, to $3.64 a pound.

The revisions are the latest in a string of cuts to banks' copper forecasts. UBS and Bank of America Merrill Lynch cut their copper forecasts earlier this week, while BNP Paribas and Goldman Sachs slashed their outlooks last month.

Copper settlements (ranges include electronic and pit trading):
Jul $3.4430; up 5.00 cents; Range $3.3890-$3.4460
Sep $3.4475; up 4.95 cents; Range $3.3885-$3.4525

 
   

 

Comex Copper Rises Ahead Of Fed; Pares Gains After

Industry News 09:39:20AM Jul 12, 2012 Source:SMM

Jul 11, 2012 (Dow Jones) NEW YORK--Copper futures rose Wednesday ahead of the release of minutes from the Federal Reserve's latest policy meeting, but those gains were pared after the settlement as traders didn't see any hints of new stimulus from the U.S. central bank.

During the regular session, copper for September delivery, the most-actively traded contract, rose 4.95 cents, or 1.5%, to settle at $3.4475 a pound on the Comex division of the New York Mercantile Exchange.

On Tuesday, futures had settled at a one-week low and traders were reluctant to bet on fresh losses on Wednesday in case the Federal Reserve hinted at new measures to prop up the U.S. economy.

But details of the central bank's deliberations last month, released at 2:00 p.m. EDT, didn't feature any obvious hints that it was likely to act soon. This weighed on copper and other growth-sensitive assets, with copper futures paring their gains.

"I can't find anybody who thinks QE3 is right around the corner at this point," Frank Lesh, a broker with FuturePath Trading, said, referring to a potential third round of Federal Reserve bond buying.

In post-settlement economic trading, copper for September delivery recently traded 0.4% higher, at $3.414 a pound.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries, including automobiles, construction and general manufacturing. Futures have gained in recent months when traders were anticipating growth-boosting measures from the Fed.

"I don't see any reason why copper's going to trade higher," said Bob Haberkorn, senior commodities broker with RJO Futures. "Copper is stuck in the mud right now."

Copper's losses on Tuesday came after news that China's copper imports slumped in May from the previous month. China, the world's top copper consumer, has seen slowing growth this year as its export markets have weakened under the weight of Europe's banking crisis.

Credit Suisse and Royal Bank of Scotland Wednesday joined a growing number of banks in downgrading their copper-price forecasts amid mounting concerns about the pace of global growth.

"The European wrecking ball has once again derailed the global recovery," Ric Deverell, director of commodities research at Credit Suisse, said in a note.

Credit Suisse now sees copper averaging $3.51 a pound this year, down 14% from its previous outlook. RBS slashed its average price view by 4%, to $3.64 a pound.

The revisions are the latest in a string of cuts to banks' copper forecasts. UBS and Bank of America Merrill Lynch cut their copper forecasts earlier this week, while BNP Paribas and Goldman Sachs slashed their outlooks last month.

Copper settlements (ranges include electronic and pit trading):
Jul $3.4430; up 5.00 cents; Range $3.3890-$3.4460
Sep $3.4475; up 4.95 cents; Range $3.3885-$3.4525