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$2.9035 Comex Copper Steady, Eyes Stocks For Direction

Jun 10, 2010 (Dow Jones Commodities News via Comtex) --

By Allen Sykora
Of DOW JONES NEWSWIRES

Copper futures are hovering around steady levels early Thursday while they wait to see if stock-index futures retain their overnight gains.

Around 9:11 a.m. EDT (1311 GMT), copper for July delivery rose 0.70 cent, or 0.3%, to 2.8570 per pound on the Comex division of the New York Mercantile Exchange.

Benchmark copper lost 26% of its value from the April peak to the early-June low due to worries about European sovereign-debt issues hurting the economy and Chinese efforts to cool its economy. The metal has attempted to stabilize the last two days, however, on improved economic optimism after Federal Reserve Chairman Ben Bernanke said he looks for continued growth this year and next and an unconfirmed news report Wednesday said China's May exports would rise roughly 50%.

So far this morning, copper is hanging onto its gains from Wednesday.

"At the moment, they're steady, sort of watching and waiting to see how equities perform," said Frank Lesh, broker and futures analyst with FuturePath Trading in Chicago.

Stocks are often viewed as a proxy for the economy, he said, and thus potential demand for industrial commodities. The Dow and S&P futures both rose overnight ahead of the open on Wall Street.

China reported its May exports rose 48.5% from a year earlier, reflecting favorably on the economy in the world's largest copper-consuming nation. However, market impact was muted since the result was expected, analysts said.

Meanwhile, Chinese import data released overnight showed that the country's copper demand remains "quite healthy," even if it fell last month, said MF Global analyst Edward Meir. China imported 396,712 metric tons of copper, copper alloy and semifinished products in May, down 9.1% from 436,345 tons the previous month, according to preliminary data provided Thursday by the General Administration of Customs.

Still, said Meir, "this level is still pretty high compared to March and April numbers, which were the second-highest and third-highest on record." Furthermore, copper imports for the year to date so far are up from a year ago.

Nevertheless, Lesh said, worries about future Chinese copper demand have not gone away. Manufacturing activity has been strong so far, he said.

"The concern now is they may back off a little bit," he said.

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; [e-mail]

(END) Dow Jones Newswires

06-10-10 0925ET

http://news.tradingcharts.com/futures/7/2/140899427.html