London Metal Exchange copper battled with easing supply concerns Thursday to fall to an eight-month low triggering technical selling on its way down, traders and analysts said.
Three-month prices touched $6,320 a metric ton, the lowest level since April on fund technical selling following news of the third and last of the negotiating workers unions at Codelco voting to accept the company's pay offer.
Funds have taken the reins and are seeking to push prices closer to the $6,000/ton mark, UBS analyst Robin Bhar said.
As concerns for the supply side ease, sluggish demand in the U.S. given a slowing housing market and concerns for economic performance going forward are making themselves more strongly felt, traders said.
This has resulted in an increasing amount of stocks sweeping into LME warehouses in the U.S., a yardstick for copper availability in the physical market.
Away from the benchmark three-month contract, copper prices have gained, particularly the December 2010 date.
This trend reflected a 'strong-for-longer' view which is based on robust consumption growth from the developing world and constraints on supply, largely stemming from a deterioration in the quality and quantity of available resources, Bhar said.
Copper's bearish performance dominated the rest of the LME board, weighing down zinc prices to a one-month low of $4,130/ton, down 2.1% and nickel also fell to a one-month low, down to $31,900/ton.
Thin trading volumes exacerbated the move, Michael Skinner of Standard Bank said.
LME aluminium on the other hand maintained a sideways pattern.
Friday sees the release U.S. durable goods data at 1330 GMT, which are expected to grow by 1.0%.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Wednesday PM kerb
Copper 6330.00-6340.00 Dn 195.00
Lead 1610.00-1620.00 Up 5.00
Zinc 4130.00-4135.00 Dn 90.00
Aluminium 2768.00-2770.00 Dn 4.00
Nickel 31900.00-32000.00 Dn 900.00
Tin 10950.00-11000.00 Dn 45.00
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