Copper Futures Decline Amid Soft US Housing Report

Copper futures finished with a modest decline on Tuesday as a soft report on US housing starts kept the market from rallying with equities or benefiting from a decline in the dollar. The most-active December copper dipped 1.10 cents to settle at $2.7745 per pound on the Comex division of the New York Mercantile Exchange. Analysts pointed to a combination of factors, including lower-than-expected housing numbers, inventory builds in Shanghai and London exchange, and the delay in China's economic stimulus package, as contributing to the decline.

Key Takeaways:

• Copper futures declined by 1.10 cents to settle at $2.7745 per pound on the Comex division of the New York Mercantile Exchange, the most-active December copper.
• The soft report on US housing starts, which fell 1% to an annual rate of 581,000, contributed to the decline in copper prices.
• Analysts cited the delay in China's economic stimulus package, inventory builds in Shanghai and London exchange, and a soft European economic data as factors holding copper prices back.
• The dollar index's decline was not enough to boost copper prices, which normally benefit from a weaker dollar.
• Inventories of copper stored in London Metal Exchange warehouses fell 1,300 metric tons on Tuesday, but copper prices still declined.

Statistics:

• Copper futures declined by 1.10 cents on Tuesday.
• The most-active December copper settled at $2.7745 per pound on the Comex division of the New York Mercantile Exchange.
• US housing starts fell 1% to an annual rate of 581,000 in July.
• Building permits fell 1.8% to a 560,000 annual rate in July.
• The dollar index declined by a little more than a quarter of a point.
• Inventories of copper stored in London Metal Exchange warehouses fell 1,300 metric tons on Tuesday.

Sources:

• Dow Jones Commodities News via Comtex (Aug 18, 2009)
• Allen Sykora, Dow Jones Newswires (541-318-8765; allen.sykora@dowjones.com)