US copper rebounds to end firm

US copper futures erased earlier losses to close slightly higher on Monday, buoyed by short-covering and new buying interest after sharp morning declines failed to push prices through any significant technical levels, analysts said.
"The only thing I see is that we went down to $3.30, which was a round number. There was a little bit of support there and it held at $3.2950, to tun higher," said Scott Meyers, senior trading analyst with Pioneer Futures in New York.
"I think they just kind of exhausted the downside at that round number and just brought it back up. Some fresh buying probably came in as it took out the $3.35-$3.36 level, taking it back up to $3.40 before settling at $3.39. So, a good settlement. I think it should work higher from here," Meyers said.
Copper for September delivery settled up 1.45 cents to $3.3980 a lb on the New York Mercantile Exchange's COMEX division, rebounding from a 1-1/2-week low at $3.2950 and trading as high as $3.4090.
Soon-to-be spot July copper rose 1.50 cents to $3.3970, while the rest of the board closed with gains ranging from 1.40 to 1.65 cents. Final estimated futures volumes totaled 20,461 lots, nearly double that of Friday's count at 11,074 lots.
As of June 22, open interest in COMEX copper futures rose 364 lots to 80,015 contracts. A large build in London copper stockpiles and festering fears that a higher interest rate environment will slow the global economic expansion prompted liquidation in the industrial metal.
"Higher rates make the metal more expensive to hold. Higher rates are anti-inflationary, and higher rates are not only in the US...China and the ECB are signalling higher rates, which slows up deliveries. If you have slower expansion, you have less need for the base metals," said George Gero, vice president at RBC Capital Markets Global Futures in New York.
On the economic front, sales of existing US home sales slipped in May from April, the National Association of Realtors said, but it was slightly faster than economists had forecast.
London Metal Exchange copper warehouse inventories increased 1,200 tonnes to 119,025 tonnes on Monday, but were still at historically low levels, accounting for less than three days of global consumption. COMEX stocks fell 311 to 22,746 short tons on Friday.
"Overall trading is likely to remain choppy this week with all eyes on LME stocks as well as the labour talks going on in copper across North and South America," said William Adams, metals analyst with BaseMetals.com.
In Chile, a blockade by subcontractors at Codelco's Teniente division will have a slight effect on output there after a union shift was prevented from entering, a company source told Reuters on Monday.[ID:nN25307806]
Also, workers at the Collahuasi copper mine, one of the world's largest, burned tires on a road near the mine on Friday to protest management's latest contract offer, and said they would vote to strike at a meeting next week.
Meanwhile, workers in Peru launched a strike on Saturday to demand higher wages from Southern Copper, one of the world's largest copper producers, but the company said on Monday that the strike was "partial".
"There are on average around 30 to 35 percent of workers on the job," Alberto Giles, the director of human resources at Southern Copper told Reuters. A work stoppage at Xstrata Plc'sCanadian copper refinery (CCR) entered into its second week.
The non-commercial net short position in COMEX copper futures eased to 8,362 lots in the week ended June 19, from 8,982 lots the previous week, trade data from the Commodity Futures Trading Commission showed on Friday. LME copper for delivery in three months slipped to a one-week low before settling at $7,480 a tonne, up $45 from Friday's close.