Jul 20, 2012 (Dow Jones) NEW YORK--Copper futures settled at a one-week low on fresh concerns about demand for the metal from China and pressure from a stronger dollar.
The most-actively traded contract, for September delivery, slumped 8.65 cents, or 2.5%, to settle at $3.4480 a pound on the Comex division of the New York Mercantile Exchange. This was the lowest settlement price since touching $3.4150 on July 12.
Chinese authorities instructed local government to maintain tight controls on the property market to prevent a rebound in home prices, according to an urgent government notice reported by state media.
China accounts for about 40% of global copper demand, and the country's booming real-estate market has been a key consumer of copper electrical wires and plumbing.
A weaker stock market added to downbeat atmosphere. The Standard & Poor's 500 stock index was recently down 0.9% at 1363.77. Copper and equities tend to move in tandem as both are considered leading indicators of economic growth.
"There's concern about Chinese demand and, of course, there's also concern about European demand and U.S. demand. Any time you see equity weakness or soft economic data, that's going to have an effect on our perception of copper demand," said Frank Lesh, broker and futures analyst with FuturePath Trading in Chicago.
Dollar-denominated copper futures faced pressure from a stronger dollar. The dollar rallied against the euro and other international currencies, with the WSJ Dollar Index recently trading up 0.7% at $72.360.
Copper futures are traded in dollars and become more expensive for investors who use other currencies when the dollar strengthens.
Copper settlements (ranges include electronic and pit trading):
Jul $3.4485; down 8.55 cents; Range $3.4230-$3.5070
Sep $3.4480; down 8.65 cents; Range $3.4180-$3.5285