http://www.reuters.com/article/marketsNews/idLTAN0838079920080108?rpc=44&sp=true
NEW YORK, Jan 8 (Reuters) - U.S. copper futures climbed to their highest level since mid-November in morning business on Tuesday, with broader sector strength underpinning the industrial metal's early advance, traders said.
"I think copper is just seeing sector strength right now from a general buy into all things commodity today," said Zachary Oxman, senior trader with Wisdom Financial in Newport Beach, California, referring to the re-balancing of commodity indexes. "It just looks like a big buy across the board in commodities. I think gold will hold, but I don't see copper holding."
Copper for March delivery HGH8 was trading up 9.90 cents, or 3.15 percent, to $3.24 a lb by 10:33 a.m. EST (1533 GMT) on the New York Mercantile Exchange's COMEX division, easing back from an earlier session peak of $3.2750, its highest since Nov. 15.
Volumes were estimated at 11,082 lots by 10:00 a.m.
The re-balancing of indexes involves selling assets that have registered healthy gains, and buying those that have underperformed.
Despite copper's early burst higher, ever-present concerns in the market that a global economic slowdown will impact future demand growth will likely keep the industrial metal on the defensive, longer-term.
"I see a lot of downside in the industrial metals. The economy will absolutely slow. I think we're in the middle of a recession right now and I think there is a lot of worry that it's due to hit the economy very soon," Oxman said.
A firmer tone in both Asian and London copper markets overnight fed into the early strength in New York, traders said.
Copper gained more than 1 percent in Shanghai and London on Tuesday, buoyed by tightness in the world's biggest consumer, China, but spot premiums in China are easing, which in turn may undermine futures markets.[ID:nSP32702]
On the production front, Mongolia has withdrawn a draft investment agreement from consideration by Parliament for a big copper and gold project backed by Ivanhoe Mines, which suggests further delays for the long-awaited Oyu Tolgoi venture.[ID:nPEK84627]
Fundamentally, the trade will continue to keep an eye on the labor developments in Chile, where subcontract workers at Codelco, the world's largest copper producer, plan to give the company until the end of the month to resolve a labor dispute or face intensified strikes.[ID:nN04306693]
Meanwhile in Zambia, over 500 construction workers have launched a strike over pay at the Chinese-owned Chambishi copper smelter last Thursday.[ID:nL05282442]
London Metal Exchange (LME) copper for delivery in three months MCU3 last traded at $7,166 a tonne, up $266 from Monday's kerb close.
LME copper warehouse stocks eased 25 tonnes to 200,975 tonnes on Tuesday, while COMEX copper stocks were off 5 to 14,926 short tons on Monday. (Reporting by Chris Kelly; Editing by Marguerita Choy)
Add to My Watchlist
What is My Watchlist?
