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Comex copper ends softer in lackluster session

NEW YORK: Comex copper futures settled slightly lower Thursday after days of fund liquidation, contract rollover, and rising London Metal Exchange stocks left the market dazed.

Light volume and thin open interest in the nearby months made for a featureless session, dealers said.

"The trade might be starting to get long at these levels, but the volume isn't too significant," a floor source said. "We could be in this range for a couple of days."

Active May lost 0.60 cent to 79.70 cents a lb, ranging from 79.10 to 80.55 cents, spot March was off 0.55 cent to 78.60, and the rest fell by 0.60 cent.

Open interest fell 1,170 contracts to 67,177 contracts, and final volume for Comex copper reached an estimated 10,000 contracts,

"We we're able to hold the lows from earlier in the week, and that prompted a little shortcovering," said AG Edwards commodity commentator James Quinn.

But he added that "with gold and silver on the defensive, unless you get some real surprise in tomorrow's unemployment numbers that would effect equities, copper will work its way down to 78 cents."

London Metal Exchange copper stocks on Thursday jumped 10,250 tonnes to total 834,150 tonnes, but sources said the news did not play a major role in trading.

"An early selloff brought it down to 79.10, and then they started buying it back up," one floor trader said. "I don't see any big funds -- it's just trade and (arbitrage)."

Friday, LME stocks swelled by almost 25,000 tonnes, sending copper prices spiraling in a heavy selloff. But overall, copper's supply and demand balance was seen as tightening this year, according to industry analysts.

In London, modest bargain-hunting kept small speculativce sales in check as three-months copper climbed from earlier session lows around $1,740, dealers said.

LME three-months copper fell to $1,754 a tonne, down $19 from Wednesday's close and in line with sentiment that it rest above $1,750 to avoid testing lower support near $1,700 a tonne.

Comex traders said they saw no stop orders in the book at recent low levels, but they expected buyers in the LME to come in below $1,740 a tonne -- roughly equivalent to the 79-cent mark in Comex May copper, one said.

Traders pegged near-term support in Comex May copper at 78 cents a lb and again at 77.80 cents, while resistance was seen near 81 cents.

Wednesday's offical volume totalled 12,347 contracts, while Comex stocks were up 172 short tons to 95,808 tons.

Comex is a division of the New York Mercantile Exchange. -Reuters