Copper Futures Close Slightly Lower Amid Stronger Dollar and Car Sales Data

Strategic Insights -

Copper futures struggled to stabilize on August 2, 2011, as a stronger dollar kept prices under pressure despite a modest increase in July US car sales. The Comex September copper contract settled at $4.3950/lb, a 0.3% decrease from the previous day's close. Car sales data, which is closely watched by traders due to copper's widespread use in the manufacturing industry, showed a mild uptick in domestic new-vehicle sales for July, with General Motors Co. (GM) reporting an 8% increase and Ford Motor Co. (F) reporting a 9% increase.

Key Takeaways:

  • Copper futures closed slightly lower on August 2, 2011, as a stronger dollar kept prices under pressure.
  • Modestly higher July US car sales, led by General Motors Co. (GM) and Ford Motor Co. (F), tempered downward pressure on copper futures.
  • The Comex September copper contract settled at $4.3950/lb, a 0.3% decrease from the previous day's close.
  • Thinly traded August-delivery copper was down 1.50 cents, or 0.3%, at $4.3890 a pound.
  • Car sales data showed a mild uptick in domestic new-vehicle sales for July, with General Motors Co. (GM) reporting an 8% increase and Ford Motor Co. (F) reporting a 9% increase.
  • Ford recaptured the No. 2 position in domestic sales behind General Motors Co. (GM).
  • Chrysler Group LLC's US sales grew 20% in July from last year, although operating off a much smaller base than GM and Ford.
  • A recent spate of weak economic news continues to weigh on trader sentiment, according to Daniel Pavilonis, senior market strategist with MF Global.

Statistics:

  • Copper futures closed $4.3950/lb, a 0.3% decrease from the previous day's close.
  • July US car sales showed an 8% increase for General Motors Co. (GM) and a 9% increase for Ford Motor Co. (F).
  • Chrysler Group LLC's US sales grew 20% in July from last year.
  • The dollar marched higher against a basket of foreign currencies, with the ICE Dollar Index rising to 74.525 from 74.329 late Monday in New York.
  • The labor strike at the world's largest copper mine, Escondida in northern Chile, is in its 12th day and losing around 3,000 metric tons of copper a day due to the strike.

Sources:

  • Dow Jones Commodities News via Comtex
  • Comex September copper contract
  • General Motors Co. (GM)
  • Ford Motor Co. (F)
  • Chrysler Group LLC
  • Dow Jones Newswires
  • Tatyana Shumsky, Dow Jones Newswires
  • Carolina Pica, Dow Jones Newswires
  • Daniel Pavilonis, senior market strategist with MF Global
  • Sterling Smith, analyst with Country Hedging
  • BHP Billiton Ltd.
  • Rio Tinto PLC
  • Mitsubishi Corp.