US copper extends weekly losses

US copper futures closed down on Tuesday, extending a reversal from Monday's nearly 5-week peak, as softer US housing data and weakness in the London base metal complex prompted rangebound business, brokers said.
"It really feels like we're just settling into a range in here," said Frank Leash, broker and futures analyst with Future Path Trading in Chicago. "Yesterday, we tested the top of the range at $3.52 and just last week we were looking at the bottom of the range, down at $3.21," he said.
Most-active September copper ended down 2.05 cents to $3.3995 a lb. on the New York Mercantile Exchange's Comex division, after dealing in a relatively quiet band between $3.3620 and $3.4190. Soon-to-be spot July copper fell 2.35 cents to $3.3945, while the rest of the board settled down from 0.65 to 2.20 cents. Futures volumes were estimated at 17,342 lots by the close on Tuesday compared with the prior session's final count at 16,822 lots.
As of Monday, June 18, open interest in Comex copper futures rose 158 lots to 78,247 contracts. A drop in US housing starts during May cast a bearish tone over futures trade on Tuesday as worries resurfaced that demand would slow for the industrial metals used in plumbing and electrical wiring. US housing starts in may fell 2.1 percent to an annual pace of 1.474 million units in May compared with a 1.506 million unit pace in April.
Building permits, which signal future construction plans, rose in May by 3.0 percent to a pace of 1.501 million units. Lesh said the 2.1 percent drop and the rise in building permits seemed to offset one another.
"But, some people are citing the fact that the gains were all in multiunit dwellings and the single family homes are still looking pretty bad, and that's where your demand comes from the single family rather than the multiunit dwellings, at least for copper," he said.
A more than seven- percent slide in nickel prices on the London Metal Exchange placed additional pressure on copper futures, traders said. "Nickel prices have come off, lead was off, so when the base metals are off, it takes some support away from the copper," one said.
Dwindling LME inventories and threatening strike action would continue to underpin prices, limiting any severe losses, he added. London copper warehouse inventories declined 1,650 tonnes to 114,950 tonnes on Tuesday, they're lowest since last October and less than three days of global consumption.
Comex stocks fell 177 to 24,165 short tons on Monday. Subcontract workers at Chile's Codelco plan to meet in general assembly on Thursday to give the final go-ahead to a strike across the five divisions of the world's largest copper producer, a spokesman said on Tuesday.
Stalled contract talks at Chile's Collahuasi, one of the world's largest copper mines, and threatening strike action at Southern Copper Corp's two copper mines and a smelter in Peru offered additional support.
Meanwhile, Strata Plc said no meetings were planned with unionised workers at its Canadian Copper Refinery (CCR) in Montreal who went on strike last week, forcing the Anglo-Swiss miner to declare force major at the refinery. LME copper for delivery in three months closed at $7,430 a tonne, down $110 from Monday when it hit a five-week high of $7,695.