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$2.9535 Copper Rises On Inventory Draws, Stable Equities

Jul 19, 2010 (Dow Jones Commodities News via Comtex) -- By Matt Day

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Copper futures rose Monday as declining inventories and stability in equities led to speculation that demand may strengthen despite worries about the pace of economic recovery.

The most actively traded contract, for September delivery, rose 2.1 cents, or 0.7% to $2.95 a pound on the Comex division of the New York Mercantile Exchange.

Copper extended gains after U.S. equities opened higher on cautious optimism about coming economic indicators. Analysts said commodities traders would focus on the week's housing and corporate earnings reports as a measure of coming demand.

Meanwhile, copper housed in London Metal Exchange-monitored warehouses continued their decline Monday, dropping by 3,575 metric tons, to 422,850. LME inventories have fallen 6% in July.

The trend is particularly significant because it goes against an expected summer build in stockpiles, said Gayle Berry, analyst with Barclays Capital. The average daily draw in stocks has almost doubled in July from the previous month's levels, Berry said, and total 2010 demand should come in at double the bank's estimates made in January.

Copper investors would also continue to track movements in U.S. equities markets, said Charles Nedoss, senior market strategist with Olympus Futures in Chicago. He said it would take better-than-expected economic data to push prices above the psychologically important $3 a pound mark.

The metal is tied to global economic activity because of its uses in wiring and piping, making prices sensitive to economic sentiment and the current growth outlook. Copper futures were hit hard earlier this year by worries about euro-zone sovereign debt and a slowdown in U.S. growth.

-By Matt Day, Dow Jones Newswires; 212-416-4986; [e-mail]

(END) Dow Jones Newswires

07-19-10 1002ET

http://news.tradingcharts.com/futures/3/7/142604773.html