London Metal Exchange (LME) three-month copper peaked at $7,615 a ton, its priciest since May 30, before falling back to end the day with a mild 50-cent loss at $7,510.
Bucking London's softer price trend, the COMEX July contract in New York ended up 1.20 cents at $3.3955 per lb, after dealing from $3.3675 to $3.4775.
COMEX copper volumes reached 86,500 lots in late New York business, more than 12 percent above the 30-day norm, according to preliminary Thomson Reuters data.
U.S. copper has shed some 12 percent since the beginning of May as investor worries mounted about global growth prospects from Europe's escalating debt crisis, China's slowdown and the United States' ability to sustain its recovery.
Reflecting this worry, Spanish 10-year government bond yields rose above 7 percent, the approximate level at which Greece, Ireland and Portugal were forced to seek international bailouts.
Copper prices are unlikely to fall much from current levels as prices have corrected significantly from April this year and at lower levels demand support is expected while some new mining investments are being differed which are also expected to limit supplies in medium term.
In the last three months, prices on the LME have declined by 13.28% dragged by the Eurozone crisis and the slowing growth in China. On March 13, three month copper on the LME was trading at USD 8,530 per tonne declining to trade at USD 7,397.50 per tonne on June 13th 2012.
Codelco, the Chilean state copper producer said that some mining companies are differing investment which is likely to eradicate expectations of copper market surplus in 2015 too. Hence, the deficit copper market situation is likely to continue, proving to be bullish for prices.
The International Copper Study Group also expects the world to be in a deficit for the third consecutive year. The deficit is likely to be 240,000 tonne this year. This would limit the fall in copper prices despite the macroeconomic concerns looming markets.
Copper consumption is rising dramatically in China, Brazil and India. Copper imports are normally an indicator of economic activity. For the first five months of 2012, copper imports by China increased by 52% year on year as demand for the red metal continued to soar. China's huge imports in the month of May further suggest firm demand from the world's major commodity buyer.
China's copper imports surged 65% in May, as compared to the previous year, fuelling hopes of a pickup in growth. Copper imports climbed to 419,741 tonnes in May, 11.9% more than a month ago, according to data from the Shanghai Metals Market.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service