CME Revises Some Copper Trades as Prices Reach Eight-Month High

Dec 24, 2013 2:04 pm ET

Dec. 24 (Bloomberg) -- CME Group Inc. said it changed some copper trades on its Comex metals unit following an error after prices jumped to an eight-month high.

Trades above $3.42 a pound around 11:49 a.m. New York time for the March contract, the most-active by open interest, were revised down to that level, Damon Leavell, a CME spokesman in New York for CME, said today in a telephone interview. He didn’t provide details on how many contracts were involved. Copper jumped as much 4.2% to $3.4475.

Earlier, copper gained as U.S. orders for durable goods climbed more than forecast in the U.S., the world’s second- biggest user of the metal. Bookings for goods meant to last at least three years climbed 3.5 percent in November, government data showed today. The median estimate of 75 economists surveyed by Bloomberg called for a 2 percent increase.

“That type of strong economic report is going to be the catalyst for pushing copper higher for 2014,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. Prices may rally as high as $3.90 a pound after topping $3.40, he said.

Copper futures for March delivery gained 2 percent to close at $3.374 at 12:11 p.m. on the Comex in New York, the highest settlement since May 22. The intraday peak of $3.42 was the highest since April 12. Floor trading closed early before the Christmas holiday tomorrow.

This month, copper has jumped 5.3 percent, heading for the biggest gain since September 2012. In 2013, the metal has dropped 7.6 percent.

China Rates

Copper also gained today after money-markets rates tumbled in China, the biggest user of the metal, as the central bank added funds.

“It comes at an interesting time because the Chinese have been trying to rebuild their inventories ahead of the Chinese New Year,” Michael Turek, a senior director at Newedge Group SA in New York said by telephone today. “Easier money rates will definitely help them to achieve that end.”

On the London Metal Exchange, copper for delivery in three months climbed 0.6 percent to settle at $7,283 a metric ton ($3.30 a pound).

Stockpiles tracked by the LME have tumbled 45 percent from this year’s peak on June 24. Copper will advance to $7,836 in 2014, according to a Bloomberg survey.

Zinc increased 0.9 percent to $2,075 a ton. Earlier, the price reached $2,087, the highest since Feb. 28. In December, the metal has climbed 10 percent, heading for the biggest gain in 15 months. Inventories have dropped to the lowest since March 2012.

Lead climbed, while aluminum, tin and nickel fell.

The LME and Comex will be closed tomorrow for the Christmas holiday. The London market will be shut on Dec. 26.

--With assistance from Maria Kolesnikova in London. Editors: Patrick McKiernan, Thomas Galatola