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Copper Futures Fall as Weak Housing Market Data Weighs

Strategic Insights

— 1 min read

Copper futures declined on Monday due to concerns over the US housing market, with the most actively traded contract settling at $3.5045 a pound, a 0.5% decrease from the previous day. The decline marks a pause in the upward trend of copper prices, which had reached their highest levels since April. Analysts attribute the decline to the weak US housing market, which is reflected in the National Association of Home Builders' housing market index standing at 13, a reading below 50 indicating pessimism about the sector.

Key Takeaways:

  • Copper futures fell 1.75 cents, or 0.5%, to settle at $3.5045 a pound on the Comex division of the New York Mercantile Exchange.
  • The decline was attributed to a weak reading on the US housing market, which pushed prices back from last week's five-month highs.
  • Strong demand from emerging markets, particularly China, is expected to continue supporting upward price trends for metals.
  • Copper inventories stored in London Metal Exchange-monitored warehouses continued to decline, falling by 1,700 metric tons to 382,500.
  • Ongoing inventory declines have supported prices, and some analysts see a supply deficit in 2011.
  • The National Association of Home Builders said its housing market index stood at 13 in September, the same low reading as August.
  • A separate report from the National Bureau of Economic Research stated that the US recession came to an end in June 2009.

Statistics:

  • Copper futures settled down 1.75 cents, or 0.5%, at $3.5045 a pound on the Comex division of the New York Mercantile Exchange.
  • Copper inventories stored in London Metal Exchange-monitored warehouses declined by 1,700 metric tons to 382,500.
  • Copper inventories are down by 4% in September and have declined by 24% this year.
  • The National Association of Home Builders' housing market index stood at 13 in September, a reading below 50 indicating pessimism about the sector.
  • The US recession ended in June 2009, according to the National Bureau of Economic Research.

Sources:

  • Dow Jones Commodities News via Comtex (New York, Sep 20, 2010)
  • Heritage West Financial in San Diego (Ralph Preston, senior market analyst)
  • National Association of Home Builders
  • National Bureau of Economic Research
  • Barclays Capital analyst Kevin Norrish
  • Dow Jones Newswires (By Matt Day, 212-416-4986, matthew.day2@dowjones.com)
  • Comtex
  • Comex division of the New York Mercantile Exchange

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