FX.co ★ Copper Review for 10/11/2010

Copper futures closed on the downside on Wednesday amid the profit fixation by the traders after reaching new highs, the US dollar strengthening and weak economic data on import of China.

By the end of deals on COMEX the December contract closed on the downside by 7.4 cents or by 1.8% to 3.969 dollar/pound. On Tuesday the contract reached the highest mark from July 2008, but on Wednesday it lost the won positions, as the traders were fixing their profit. At present moment, the copper futures are trading on the upside by 6,3% in November.
The Chinese data on copper import reduced in October the second straight month that has put a downward pressure on futures. China is the major copper consumer. According to the report of China's Main Custom Authority, the import in October amounted to 273 511 tones that by 26% lower than the September indicator.

Partly the downtrend was caused by the production activity fall in China during the week holidays at the beginning of October.
Many observers expect the November demand to rise in November. The descending pressure on the market was put by the US dollar upturn that makes the copper futures more expensive for the holders of other currencies.
Nevertheless, a positive US report restricted the metal losses on Wednesday. As it became known the trade deficit of the USA eased in September, and the jobless claims turned out to be better than anticipated. The copper is sensitive to such data, as it is widely used in the production and construction.