US copper futures closed sharply higher on Wednesday, as bargain buyers took advantage of a recent sell-off that saw the benchmark March contract slide more than 11 percent since the start of the month, traders and analysts said.
"You probably have some bottom-fishing going on right now some bargain hunters coming in at the end of the year," said Michael Gross, futures analyst with Optionsellers.com in Tampa, Florida.
Copper for March delivery settled up 7.35 cents, or 2.5 percent, to $2.9580 a lb on the New York Mercantile Exchange's Comex division, after dealing between $2.8840 and $2.9725.
On Monday, the March contract slipped to its lowest level in nine months at $2.8530, but as the market failed to slide further, short-sided investors scrambled to cover their bearish bets amid the reversal. By 1 pm EST (1800 GMT) futures volumes were estimated at a sleepy 8,041 lots, versus the 10,775 lots recorded by the close on Tuesday.
Open interest in Comex copper futures edged up 39 lots to 73,019 contracts as of December 18. Chinese importers are reducing yearly bookings for refined copper for delivery in 2008 amid fears that Beijing's economic tightening will crimp demand, traders said. Worries over softer exports of copper tubes and pipes due to the housing slump in the United States were also cutting term imports.
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