20000311

Comex copper ends firmer on mixed buying interest

NEW YORK: Comex copper futures gained on Thursday as funds and trade firms bought in moderate volume while local support contributed to the upswing, dealers said.

"The fund selling is stalled," one trader said, adding that trade and local buying nudged prices up in afternoon activity.

Floor sources had noted investment funds and futures firms bidding copper higher early in the session.

Active May rose 0.95 cent to 79.90 cents a lb, ranging from 78.70 to 79.95, spot March rose 1.00 cent to 78.85 and others firmed by 0.95 to 1.05 cents.

"There is a gap between 81.40 and 82.35 that we're going to have to fill before we do anything," a trader said. "I'm looking tomorrow for a little move on the upside and then from there I think we're going to come back off."

Technicians pegged strong near-term support in Comex May copper at 78.00 cents a lb and resistance at 82.35 cents.

Analysts reiterated a bullish outlook for copper over the long-term as supplies of the metal were expected to tighten this year.

Record increases in London Metal Exchange (LME) warehouse stocks since last month did not surprise the market fundamentally, sources said.

"Demand is strong and the 2000 balance is going to look close to flat," Refco analyst Dan Horn said.

Horn attributed copper's price fluctuations to recent economic malaise pressuring the market, but said copper would likely avoid testing lows near 78 cents a lb, basis May.

"Interest rate jitters are still capping the market and the Dow is still pretty weak. But on a supportive note, German and American fabricators have been buying copper on dips.

"They are natural buyers and its cheap enough at for them at that point," Horn said.

On the LME, three-months copper rose to $1,752 a tonne, up $24 from Wednesday's settlement. London dealers said the downtrend in prices early in the week was inspired by volatility in the US stock market, high crude oil prices, and the threat of rising US interest rates.

In other news, world copper production and consumption rose in 1999 while the overall market remained in surplus, the International Copper Study Group's (ICSG) said in its March bulletin.

Refined copper consumption grew by 4.3 percent from 1998 in the highest year-on-year increase since 1995, aiding in the reduction of overall market surplus.

On Thursday, LME copper stocks fell 3,100 tonnes to 839,875 tonnes, while Comex stocks rose 71 short tons to total 96,268 tons.

Final volumes for Comex copper were estimated at 10,000 contracts, compared with the previous official tally of 9,177 contracts on Wednesday.

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