us copper ends up on technical buys...seen strong.

Source: www.today.reuters.com/news

U.S. copper ends up on technical buys, seen strong
Thu Sep 21, 2006 2:57pm ET

NEW YORK, Sept 21 (Reuters) - Copper futures in New York closed up over 1 percent on Thursday in mostly technical business, with further upside expected in the near-term, traders said.

"There was a little bit of short-covering today, with some light stops hit around the $3.42 level which kind of scared more shorts out of the market and brought us up even more," said one COMEX floor trader.

Copper for December delivery ended up 5.55 cents, or 1.6 percent, at $3.4315 a lb on the New York Mercantile Exchange's COMEX division, near the upper end of its $3.3345 to $3.45 trading band.

Support was seen at the psychological $3.30 level, followed by the Wednesday low at $3.2550, while resistance lurked at around the $3.66 area, floor dealers said.


Spot September gained 5.20 cents to its session peak at $3.4220, while the rest of the board finished the day with gains ranging from 3.85 to 5.75 cents.

COMEX final copper volume was estimated at 16,000 lots, against Wednesday's official 11,994 lots.

On Wednesday, COMEX copper futures rallied off of an 8-1/2 week low at $3.2550 on chart-based buying and speculative short-covering that had some participants feeling the market's recent down-trend channel was broken.

"We have had two recent breakdowns in this market and we have come back pretty nicely from them, so I think this recent rally has legs," one floor dealer noted.

However, analysts were quick to point out that copper prices were still confined to their near three-month range, with worries over slowing economic growth capping rallies and the possibility of supply shortages due to upcoming labor contract renewals at major miners and tight inventory levels limiting the downside.

The owners of Chile's Spence copper project, Anglo-Australian mining giant BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research), and union workers said Wednesday that they thought labor mediators could help them reach an agreement and avoid a strike. If the two sides are not able to come to an agreement by Sept. 25, a strike will begin on Sept. 26.[nN20219223]

Earlier in the week, a mediator was called in to help Teck Cominco Ltd. (TCKb.TO: Quote, Profile, Research) and unionized workers at its Highland Valley copper mine in British Columbia reach a new labor contract.[nN18293978]

Meanwhile, London Metal Exchange-monitored warehouse stocks decreased by 600 tonnes to 123,325 tonnes on Thursday, while COMEX stocks rose by 568 short tons to 18,091 tons in Wednesday's daily report.

LME three-months copper ended up $130 at $7,560 a tonne from Wednesday's kerb close.

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