Copper Futures Finish Lower as Participants Book Profits and Market Consolidates

Strategic Insights -

Copper futures declined Tuesday as investors took profit and the market stabilized at higher levels. May copper prices settled at $1.7240 a pound, a 2.3-cent decrease from the previous day. Analysts attributed the decline to profit-taking, with Sterling Smith, vice president of FuturesOne, stating that the market was consolidating at higher levels. Ralph Preston, senior market analyst with Heritage West Financial, expressed bullish sentiment, citing continued inventory drawdowns. Inventories of copper stored in London Metal Exchange warehouses fell 325 metric tons, leaving them at 494,525 metric tons.

Key Takeaways:

  • Copper futures prices decreased by 2.3 cents to settle at $1.7240 a pound on the Comex division of the New York Mercantile Exchange.
  • Analysts attributed the decline to profit-taking, with Sterling Smith of FuturesOne stating that the market was consolidating at higher levels.
  • Ralph Preston of Heritage West Financial expressed bullish sentiment, citing continued inventory drawdowns.
  • Inventories of copper stored in London Metal Exchange warehouses fell 325 metric tons, leaving them at 494,525 metric tons.
  • The decline in copper stocks was negligible, but there was a sharp decline in canceled warrants, with copper warrants shrinking by two-thirds over the past two weeks.
  • Barclays Capital research noted that the emerging trends in LME data indicate less support for copper prices in the near term.
  • Comex copper often takes cues from the metal's price movements in London, where inventories have been decreasing.
  • Analyst Edward Meir of MF Global advised scaling back some length in copper, citing a possible sizable retreat back into the trading range.

Statistics:

  • Copper futures prices decreased by 2.3 cents to settle at $1.7240 a pound.
  • Inventories of copper stored in London Metal Exchange warehouses fell 325 metric tons.
  • Copper warrants declined by two-thirds over the past two weeks.
  • Comex copper inventory remained unchanged at 44,441 short tons.
  • London Metal Exchange warehouses held 494,525 metric tons of copper.

Sources:

  • Dow Jones Commodities News via Comtex
  • Sterling Smith, vice president with FuturesOne
  • Ralph Preston, senior market analyst with Heritage West Financial
  • Edward Meir, analyst with MF Global
  • Barclays Capital research note
  • Barclays note
  • Matt Whittaker, Dow Jones Newswires; 201-938-5959; matt.whittaker@dowjones.com