Oct 22, 2012 (Dow Jones) NEW YORK--Copper futures marked a fresh six-week low Tuesday amid pressure from a weaker stock market and concerns about future demand.
The most actively traded contract, for December delivery, fell 1.55 cents, or 0.4%, to settle at $3.6220 a pound on the Comex division of the New York Mercantile Exchange.
The Standard & Poor's 500 stock index was recently down 0.6% at 1425.34, while the Dow Jones Industrial Average was down 0.6% at 13271.
Copper and equities have a history of moving in step as both assets are highly sensitive to the economy's outlook and are considered a reflection of investors' growth expectations.
"I think copper's foretelling that equities aren't going to give you the multiyear highs in the S&P and Dow that everyone thought we were going to have," said Adam Klopfenstein, senior market strategist with Archer Financial Services.
Mr. Klopfenstein added that the downbeat earnings season will prompt companies to refocus on cost-cutting measures like reducing inventories, and this will force copper prices to retreat as low as $3.10 a pound in the coming months.
"I think you're going to see $3.10 before you see $4," he said.
Copper is a key raw material for companies involved in general manufacturing, electronics, automotive production and construction.
Economic data from China last week continue to be a point of concern, Edward Meir, senior commodity analyst with INTL FCStone, said in a research note. The world's largest consumer of copper reported 7.4% economic expansion in the third quarter, in line with expectations.
However, China continues to rely on exports, which make up roughly a third of the economy, and the government remains wary of sparking inflation, especially in housing, Mr. Meir said.
"Overall Chinese consumption, a sector the government is hoping will grow significantly on the back of a stronger yuan, is still falling short in rivaling massive government spending," he added.
Copper settlements (ranges include electronic and pit trading):
Oct $3.6255; down 2.30 cents; Range $3.6230-$3.6400
Dec $3.6220; down 1.55 cents; Range $3.6085-$3.6525