RTRS: US copper sinks below $1.50/lb on economic worries
U.S. copper futures fell back below the $1.50 a lb level early Thursday, as surging inventory levels and fears of a deepening global recession grounded an early-2009 rally linked to index fund rebalancing.
For detailed report on global copper markets, click on [MET/L]
* Copper for March delivery HGH9 was trading down 4.35 cents, or 2.88 percent, at $1.4680 a lb by 10:40 a.m. EST (1540 GMT) on the New York Mercantile Exchange's COMEX division.
* The morning range from $1.45 to $1.5225.
* COMEX estimated volume at 7,141 lots by 10 a.m.
* Buying ahead of reweighting of the Dow Jones AIG Index .DJAIG and S&P GSCI .SPGSCI earlier this week [ID:nL566176] boosted COMEX copper prices to a five-week high at $1.6225.
* The bullish momentum was cut short after weak U.S. economic data reinforced fears of a prolonged recession - analysts.
* Edward Meir, metals analyst with MF Global, said the statistic that did the most damage on the macro side Wednesday was the bearish ADP jobs report.
* U.S. private employers shed 693,000 jobs in December, up sharply from the revised 476,000 jobs lost in November and far more than economists estimated. [ID:nWEN2275]
* On Thursday, U.S. jobless claims fell unexpectedly by 24,000 last week, but the number of people remaining on jobless rolls rose to a new 26-year high. [ID:nN08523605]
* Economic indicator copper further weighed down by disappointing December U.S. retail sales figures. [ID:nN08485027]
* Adding to the metal's weaker demand outlook was another large build in London Metal Exchange-monitored warehouse stocks.
* LME copper stocks surged 6,375 tonnes to 357,700, their highest level since January 1994.
* COMEX copper stocks were up 395 short tons to 34,995 short tons as of Wednesday.
* On the production front, South Korea-based LS-Nikko Copper, one of the world's largest copper smelters, will cut cathode output about 10 percent due to weak demand. [ID:nSEO72160]
* Australia's Equinox Minerals Ltd. (EQN.AX: Quote, Profile, Research), which owns Zambia's Lumwana Copper Mine, plans to produce 170,000 tonnes of copper metal in concentrate in 2009 after starting production at the mine. [ID:nL845418]
* Chile's state copper commission Cochilco maintained its 2009 average copper price outlook of around $1.60 per lb and trimmed its output forecast for the year to 5.473 million tonnes. [ID:nN07471336]
* London Metal Exchange copper for three months delivery last traded at $3,225 a tonne, down $115 from Wednesday's settlement. On Wednesday, the metal rallied as much as 5.3 percent to a one-month peak at $3,570. (Reporting by Chris Kelly; Editing by Marguerita Choy)
