Forexpros – Copper futures traded in a tight range on Tuesday, hovering close to the previous session’s two-week low as concerns over the possibility of a mass downgrade of euro zone sovereign debt continued to weigh on market sentiment.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.467 a pound during European morning trade, easing up 0.1%.
The March copper contract traded between a range of USD3.469, the daily high and USD3.437, the daily low. Prices dropped to a two-week low of USD3.435 on Monday.
Copper prices plunged nearly 3.4% on Monday, its biggest one-day drop in three weeks after the latest European Union economic summit failed to ease concerns over the region’s ongoing debt crisis.
Ratings agency Moody’s said the meetings failed to deliver “decisive policy measures” to end the region’s debt crisis and added that it would revisit ratings of all euro zone member states in the first quarter of 2012.
Meanwhile, Fitch Ratings said the inability by European Union leaders to devise a “comprehensive” fix to the region’s debt crisis had intensified pressure on debt ratings of euro zone nations.
Europe as a region is second in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent weeks.
Copper prices came under additional pressure after a Freeport McMoran union spokesman said earlier that workers at the company’s Grasberg mine in Indonesia were expected to sign an agreement with the company’s local unit to end a three-month strike in one or two days.
Grasberg is one of the world’s largest copper mines. In 2010, Freeport sold 1.2 billion pounds of copper from Grasberg.
But prices found support ahead of the Federal Reserve’s rate decision later in the day. The Fed was not expected to take any policy action, although further easing steps are seen as likely next year.
Copper traders were also awaiting the outcome of the Chinese central government’s annual economic meeting, which ends on Wednesday, for any hints regarding the introduction of monetary easing measures.
China is the world’s largest copper consumer, accounting for nearly 40% of world consumption last year.
Elsewhere on the Comex, gold for February delivery eased down 0.05% to trade at USD1,667.45 a troy ounce, while silver for March delivery jumped 1.25% to trade at USD31.39 a troy ounce.
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