NEW YORK, Nov 10 (Reuters) - Copper futures in New York closed at their cheapest in 19-1/2 weeks Friday on broad-based sales pressure tied to concerns demand will not be able to keep up with the market's short-term supply glut, sources said.
Copper for December delivery <HGZ6> settled down 22.05 cents, or 6.7 percent, at $3.0885 a lb on the New York Mercantile Exchange's COMEX division, its lowest settlement since June 28. Trading ranged from $3.08 to $3.3175.
"What you're seeing is a lot of funds dumping this thing and reevaluating their positions. The highs have not been quite as high...the $3.40 area was a big failure, so I would look for lower prices earlier in the week ahead, but I don't think we're going to see a complete collapse," said Scott Meyers, senior trading analyst with Pioneer Futures.
"I think we might be at the tail end of the collapse."
Spot November <HGX6> slipped 21.80 cents at $3.0775, while deferred or back month contracts lost 11.85 to 21.90 cents.
COMEX final copper volume was estimated at 26,000 lots, against Thursday's official count at 21,034.
As of Nov. 9, open interest in COMEX copper futures fell 209 lots to 71,486 lots.
Since failing to break out above $3.70 (a lb) in early August, and again in early September, COMEX copper futures have been in a technical downtrend with analysts predicting further losses as the momentum selling increases.
"There is very much the potential for a new round of technical black box selling to come in when you get a new trend established," said Mo Ahmadzadeh, president of Mitsui Bussan Commodities (USA) Inc.. Continued...
He added that the further technical sales pressure should encourage more shorts into the market next week.
Fundamentally, increased availability of material into warehouses monitored by the exchanges in recent weeks has exacerbated the impression of a short-term supply glut, analysts said.
London Metal Exchange copper warehouse inventories added 1,625 tonnes to 148,200 tonnes on Friday, up 54 percent from the start of the year. COMEX stocks fell 972 short tons to 24,692 tons on Thursday.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose by 15 percent in the week ended Thursday, up 35,123 tonnes, from 30,410 tonnes the week before. [nSHA36191]
"There has been a complete absence of Chinese buying in the scrap market since the middle of October and there is the mystery of how little the Chinese have sought from overseas in comparison to prior years when their industrial production has grown at 10 percent a year, so they are being fed metal from a variety of internal destockings," Ahmadzadeh said.
Prospects of a quick settlement in labor talks at Chile's Codelco Norte division also weighed on market sentiment after the main union agreed to negotiate early with the company.[nN08440470]
Meanwhile, Peru's mining unions are preparing a national strike to show opposition to government proposals to change profit-sharing plans and other issues, the president of the National Federation of Mining, Metallurgy and Steel Workers told Reuters on Friday.
Southern Copper workers at the Ilo refinery in Moquegua also said they might stage a separate 48-hour strike over perceived limits on union officials' power if they don't reach an agreement with the company's human resources department. [nN10182794]
LME three-months copper <MCU3> closed at $6,900 a tonne, down $410 or 5.6 percent from Thursday's kerb close and its lowest settlement since June 29.
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