Copper Futures Slide Amid Worsening Economic Outlook

Copper futures fell for a second consecutive day on concerns that the US economic slowdown and instability in the euro-zone would negatively impact demand for the industrial metal. The US dollar's slight strengthening against major currencies also weighed on copper prices. Despite weakness in the US economic data, copper traders were looking to China's steady demand as a potential bright spot in the market.

Key Takeaways:

Copper futures fell for a second day on concerns about the US economic slowdown and euro-zone instability, with the July delivery contract down 5.1 cents, or 1.2%, at $4.0710 a pound on the Comex division of the New York Mercantile Exchange.
The US economic data, including weak housing and industrial output, weighed on equities and commodities, with copper being particularly sensitive to changes in the economic outlook due to its widespread use in construction and manufacturing.
Separate US economic reports showed that US home construction rose by less than expected last month, and weekly initial jobless claims remained above the key 400,000 level.
Leon Westgate, an analyst with Standard Bank, noted that the market was in "risk-off mode" at the moment, with steady copper demand in China being the sole bright spot in the market.
Copper traders were also monitoring developments in Greece, as the country's debt crisis continues to impact global markets.
The slightly stronger dollar weighed on copper prices, with dollar-denominated copper becoming more expensive for market participants using other currencies.

Statistics:

Copper futures fell 5.1 cents, or 1.2%, to $4.0710 a pound on the Comex division of the New York Mercantile Exchange.
The ICE U.S. Dollar Index rose to 75.712 from 75.601 late Wednesday in New York.
US home construction rose by less than expected last month at 658,000, compared to a forecasted 690,000.
Weekly initial jobless claims remained above the key 400,000 level at 426,000.

Sources:

Dow Jones Commodities News via Comtex
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