950817

Copper ends on

contract high

NEW YORK: Concerns that red metal supplies will tighten on stronger demand - as indicated by latest U.S. housing starts - spurred Comex copper to close on a contract high on Wednesday.

Active September contract ran through buy stops between 140.00 and 141.00 cents a lb after funds moved into the market in a big way for the second day in a row, traders said.

"It looks like it was all speculative buying," a floor source said. Copper has held well during the traditionally quiet summer months. "People are thinking that it didn't go down, therefore it has to go up."

Active September closed at 141.75 cents a lb, a contract high since 140.60 on July 14, up 2.80 cents, traded 143.00 to 138.20 cents a lb.

Volume was heavy at an estimated 18,000 lots compared to yesterday's official 13,796 lots. Switches almost quadrupled to 1,353.

Funds were again buying December, the next active contract, which rose 2.12 cents to 137.10 cents a lb.

"I think if we can sustain 140 cents a lb, then the next target is 145 to 146 cents a lb where there is extremely critical resistance," a floor source said.

Merrill Lynch's William O'Neill said the above forecast 1.38 million housing starts in July is constructive for copper and indicative of stronger in the fall.-Reuter