Futures Market News
Copper futures mark a second consecutive day of losses
May 03, 2012 02:01 PM
Within days after touching its highest value in roughly one month, the industrial metal slipped as a result of investors viewing the state of the global economy as too weak to sustain those high prices, Dow Jones Newswires reports.
Minimized supplies of the reddish metal elsewhere in the world pushed it to its highest value in four weeks this past Tuesday. Strong manufacturing economic data from the U.S., host of the globe's largest economy, also drove the reddish metal to its top price earlier this week.
Due to its myriad uses in construction, industry and manufacturing, copper is sensitive to economic and financial news and developments throughout the world.
But on Wednesday, underwhelming economic data tugged down the price of copper futures. April saw manufacturing in the debt-hobbled euro zone and China, host of the globe's second-biggest economy and the world's largest consumer of the reddish metal. China uses as much as 40 percent of the globe's supply of copper.
Losses to the reddish metal resumed on Thursday.
"We've got growth, but it's not enough," broker Frank Lesh with FuturePath Trading told Dow Jones Newswires. "All of these (commodities) markets are waiting for some clarity."
At 1:37 p.m. on Thursday, copper futures fell 1.41 percent, a 5.35 cent slip to $3.7335 per pound.
Stronger than anticipated unemployment data from the U.S. initially benefited copper futures but that rally was trumped by losses.
Reuters attributes the losses to nebulous circumstances with economic development and growth in the U.S.
Also dragging down the industrial metal were unsuccessful attempts to pacify concerned investors in Spain, a euro zone nation fighting to stay afloat as the sovereign debt crisis encircles it.
Spain conducted a bond auction on Thursday but, still, investors remained worried about the nation dragging down the region's effort to bounce back from damages wrought by the debt scourge. That, consequently, minimized demand for the metal.
The losses to copper come three months after it had gained 14 percent on the year. But, since then, the reddish metal has lost 5 percent of its value to amount to yearly gains thus far of roughly 9 percent.
"There is still a whole host of uncertainties in the market. There are troubles in the euro zone, and with non-farm payrolls out of the U.S. tomorrow, there is a lot of scope for volatility in commodity markets," analyst Robin Bhar with Societe Generale told Reuters.
She noted the price per metric ton has been a constant for the reddish metal but said that might not hold.
"The $8,200 level has been pretty solid support for copper," Bhar told the news source. "If it doesn't hold above that, then it could be quite bearish because it would have broken some fairly influential support levels."
The debt sale in Spain sold 2.5-billion-euros-worth of bond in denominations of three and five years. Despite the sale, expenses and costs for borrowing leaped higher as compared to prior auctions.
The Financial Times reports the reddish metal was pulled down by investors and traders in China returning to work after a long weekend.
The Asian nation holds record levels of copper but prices were driven higher after supplies elsewhere in the market were lower.
The nation's top producer and smelter of the reddish metal, Jiangxi Copper, told the news source it plans to ship the reddish metal.
That development, which occurred over the weekend, was an effort to relax the shortfall of the reddish metal.
Don’t Miss Our News Updates!
Follow our breaking news stories and get a unique take on current events that may impact the commodity futures markets. Multiple new articles are posted each weekday. Subscribe to our commodity news updates by email, and receive real-time updates with our RSS feed, follow us on Twitter @DanielsTrading, become a fan on Facebook to stay informed.
SPECIAL OFFER: The Future of Natural Gas in the U.S.
Are you interested in the Energy futures market? Sign up and receive our detailed report today!
Through our exclusive research, you will have access to current global events and price projections that may help you learn how this particular market has the potential to be a strong investment as a commodity.
Register for Your Free 2-Week Trial of the dt Insider Market Advisory!
With your free trial membership, you'll receive full access to our exclusive trade recommendation service and all of the timely and accurate trade information you need to feel comfortable participating in the markets.