Economic optimism boost US copper to firmer close -Thu Jul 17, 2008

U.S. copper futures gained nearly 2 percent by the close Thursday after a surprisingly big jump in U.S. June housing starts and an overall positive tone on Wall Street gave a hint of economic optimism.


* Copper for September delivery HGU8 ended up 6.45 cents or 1.8 percent at $3.7150 a lb on the the New York Mercantile Exchange's COMEX division.

* The session range spanned $3.6380 to $3.7315.

* By 1 p.m. EDT (1700 GMT), COMEX estimated volumes at 24,577 lots. Final volumes on Wednesday totaled 19,369 lots.

* Open interest increased 1,455 lots to 107,082 open contracts as of July 16.

* Copper up in technical rebound from Wednesday's slide to one-month low at $3.6305 - Scott Meyers, senior trading analyst with Pioneer Futures.

* Copper rallies further on data showing a 9.1 percent jump in U.S. housing starts for the month of June, although the total was pushed higher by a change to construction codes in New York City.
* Despite the positive tone, copper and other base metals will likely face further selling pressures as investors de-risk portfolios amid an uncertain economic environment

*After many years of very tight supply/demand conditions, the somewhat less robust global demand outlook is forecast to tilt the market for many metals toward a more balanced state.

*The copper market recorded a deficit of 159,000 tonnes in the first five months compared to a deficit of 42,000 tonnes for the January to April 2008 period - World Bureau of Metal Statistics.

*However, rising costs (driven by high energy prices, labor issues and logistics), still very decent consumption growth in China and the developing world (albeit lower than last year) and resurgence of interest in the use of commodities as an investment vehicle should help provide considerable protection to the metals market from downside pressures.

*Chinese imports of refined copper and copper alloy fell 17 percent in June from May.

*On the production front, owners of a new copper mine in Zambia plan to invest an initial $60.93 million to produce about 59,000 tonnes of copper concentrate at Mkushi project.

*In Chile, mining giant Codelco said it may have found a new gold and copper deposit in its northern mining heartland.