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Comex copper rallies on fund buying interest

NEW YORK: Comex copper futures raced higher on Wednesday, fuelled by buying from futures firms and funds after prices ran higher in London, dealers said.

"There has been plenty of fund buying down here all day," a floor trader said, adding that it was mostly rollover activity and some buying by brokerages.

"And London (copper) keeps upticking," he noted.

Contracts gained across the board as key March ended up 1.15 cents at 83.90 cents a lb, ranging between 82.80 to 84.00. Spot February edged 1.20 cents higher to 83.75, and May climbed 1.20 cents to stand at 85.05 cents a lb.

Back months were all 1.05 to 1.20 cents firmer.

Dealers said that a tightening of the spreads between the March and May copper contracts indicated further switching as first notice day for March arrives next Wednesday.

But March copper has yet break out of its recent 81.25-85.30 range.

"Copper is consolidating," said Scott Meyers, technical analyst at Pioneer Futures. "It's more of a trader's market than an investor's market (right now)," he said.

"85.20 is the resistance area, and if we break out of that we could see a test of the 88 level," Meyers added.

Strong support levels for the LME base metals helped to lift copper this week, propping it above earlier lows in a range between $1,820 and $1,860 a tonne, dealers said.

LME three-month copper ended Wednesday's session $23 higher at $1,856 a tonne, but later rose to $1,861.50 in quiet evening trade.

"With the overall base metal complex moving higher, copper is enjoying some of that gain," said one consultant based in the U.S.

LME stocks fell 1,575 tonnes to 791,025 tonnes on Wednesday, while Comex stocks rose 125 short tons to 95,369 tons.

In separate news, the central bank of Chile said Wednesday in a report that the nations's mining firms exported $537.5 million worth of copper free on board (FOB) in January compared with $447.8 million in January 1999.

Chile, the world's leading copper producer, exported $5.89 billion FOB of copper last year compared with $5.33 billion in 1998. Copper accounted for 38 percent of the country's exports last year, making it Chile's number-one export.

The estimated final volume for Comex copper was 16,000 contracts, compared to the official tally of 13,733 contracts on Tuesday.

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