Copper Prices Stabilize Amid European Debt Crisis Calm

Strategic Insights -

Copper futures traded near steady on Tuesday as signs of easing pressures in Europe after successful debt auctions drew some buyers back to the market after the previous day's selloff. The Comex March copper contract was down 0.1 cent at $3.463 a pound, with copper flat as traders paused after Monday's selloff. The resolution of a three-month strike at Freeport-McMoRan Copper & Gold Inc.'s Indonesia unit, which halted shipments from the Grasberg mine, one of the world's top copper mines, is expected to be reached by Thursday.

Key Takeaways:

  • Copper prices stabilized on Tuesday after successful debt auctions in Spain and Greece, easing pressure on the copper market, with the Comex March copper contract trading down 0.1 cent at $3.463 a pound.
  • The strike at Freeport-McMoRan Copper & Gold Inc.'s Indonesia unit, which began in late October, is expected to be resolved by Thursday, with analysts noting that its impact on copper prices has been limited.
  • Edward Meir, an analyst with INTL FCStone, stated that despite efforts to strengthen budgetary discipline in the European Union, little attention is being paid to policies that could potentially jumpstart growth, contributing to a grim demand outlook for raw materials.
  • Copper shipments may take time to ramp back up even after an agreement is reached to end the strike, due to damage to the mine's infrastructure incurred during the strike.
  • The strike at Freeport-McMoRan's Indonesia unit halted shipments from the Grasberg mine, one of the world's top copper mines, but copper traders have largely focused on demand prospects in the euro zone and China.

Statistics:

  • Comex March copper price: $3.463 a pound
  • Decline in copper price on Monday: by almost 3%
  • Duration of the strike at Freeport-McMoRan's Indonesia unit: three months
  • Expected resolution of the strike: by Thursday
  • Damage to the mine's infrastructure during the strike: contributing to a slower ramp-up of copper shipments after the strike is resolved

Sources:

  • Dow Jones Commodities News via Comtex, "BASE METALS: Comex Copper Pauses After Selloff" (Dec 13, 2011)
  • Dow Jones Newswires, "Copper Flat as Traders Pause After Monday's Selloff" (Dec 13, 2011)
  • INTL FCStone, Analyst Note (Dec 13, 2011)