Copper Prices Ease Amid Slower Economic Recovery and Profit-Taking

Strategic Insights -

Copper futures fell on November 24, 2009, as revised US economic data pointed to a slower recovery, inventories continued to rise, and traders booked profits from the previous day's rally. The US dollar strengthened, further pressuring the metal, which is widely used in construction, electronics, and automobiles. Economists expressed concerns that the fourth quarter would not be as strong as initially expected, dampening copper prices.

Key Takeaways:

  • Copper futures for March delivery fell 1.85 cents to settle at $3.1435 a pound on the Comex division of the New York Mercantile Exchange.
  • Nearby November copper lost 2.15 cents to $3.1120.
  • GDP revised to 2.8% annualized rate, lower than the initial estimate of 3.5% in the third quarter.
  • Frank Lesh, broker and futures analyst with FuturePath Trading, expressed concerns about the fourth quarter's strength and profit-taking.
  • Copper inventories in London Metal Exchange-monitored warehouses rose 4,725 metric tons, leaving them at 429,650.
  • Comex inventory data increased by 600 short tons to 77,761 short tons.
  • Michael Gross, broker and futures analyst with OptionSellers.com, attributed the pressure on copper to the revised GDP data.
  • The ICE Futures US dollar index was up 0.005 point at 75.090, Nymex January crude was down $1.65 at $75.91, and the Dow Jones Industrial Average was off 29.25 points at 10421.70.

Statistics:

  • Copper futures fell 1.85 cents to $3.1435 a pound.
  • Nearby November copper lost 2.15 cents to $3.1120.
  • Revised GDP increased by 2.8%, annualized rate.
  • Initial estimated GDP was 3.5%.
  • Economists expected GDP growth of 2.7%.
  • Copper inventories rose 4,725 metric tons to 429,650 in London Metal Exchange-monitored warehouses.
  • Comex inventory data increased by 600 short tons to 77,761 short tons.

Sources:

  • Dow Jones Commodities News via Comtex
  • Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com
  • OptionSellers.com
  • FuturePath Trading
  • ICE Futures
  • Nymex
  • Dow Jones Industrial Average
  • London Metal Exchange
  • US Department of Commerce