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Comex March copper ends lower, others find support

NEW YORK: Comex copper ended generally flat on Monday after light local selling that weighed on values eased and allowed prices to drift back toward even levels, traders said.

March copper closed off 0.05 cent at 82.70 cents a lb, trading between 81.90 and 83.25. Spot February copper ended mildly firmer at 82.40 cents a lb, up 0.05 cent, and May was also 0.05 firmer at 83.80 cents a lb.

"There was a steady performance," said Frederick Demler, senior minerals economist at E D & F Man. "We started out weak and firmed throughout the day. There's good underlying demand," he added.

In London, copper slipped somewhat before recovering to close $2 above Friday's afternoon kerb at $1,820 a tonne.

LME warehouse stocks rose 675 tonnes on Monday to stand at 804,400 tonnes. Comex stocks were up 47 short tons at 95,980 tons on Friday.

On a chart basis, support is at 81.25, followed by 80.50 in the March contract with no significant stop loss orders in the near vicinity. Nearby resistance is pegged at 82.85 cents, followed by 83.70/90 cents.

"There's still a gap remaining at 81.25 to 81.10," said Scott Meyers, technical analyst with Pioneer Futures. "I think we're in a trading range and closer to a short-term bottom. If we close below 81.25, I'd be on the defensive."

Estimated Comex volume Monday reached 8,000 contracts, compared with offical Friday volume of 16,563 contracts.

"I'm sure it will pick up again tomorrow," said one Comex trader. "The Mondays have been like that the last few weeks. It's slow on Monday, then you get a big move on Tuesday, Wednesday, Thursday, and profit taking on Friday."

The nine-day relative strength index for March copper made small strides back toward neutral at 33 in early trading, compared with 41 on Friday.

Technical analysts usually interpret an RSI reading of 70 or higher as indicating overbought conditions and 30 or below as oversold.

On the industry front, Canadian producer Noranda Inc. said Monday that it plans to proceed with its previously announced $170 million smelter expansion project at the Altonorte plant in Chile.

By 2003, the company anticipates raising its capacity to 820,000 tonnes per year of copper concentrate. Copper production will increase from its current 160,000 tonnes per year to 290,000 tonnes per year. -Reuters