Suspended Chinese purchases slam US copper prices
NEW YORK, Jan 12 (Reuters) - U.S. copper futures lost more than 4 percent of their value by the close on Monday as investors turned bearish after reports of a possible suspension of planned copper purchases from China's State Reserves Bureau.
For detailed report on global copper markets, click on [MET/L]
* Copper for March delivery HGH9 shed 7.10 cents, or 4.55 percent, to settle at $1.4885 a lb on the New York Mercantile Exchange's COMEX division.
* The session range from $1.4550 to $1.5960.
* Copper market looks to have found a near-term base at $1.25 (a lb). Still hesitant to push above $1.60 due to a lack of market confidence - Rob Kurzatkowski futures analyst with OptionsXpress in Chicago
* COMEX estimated volume at 11,560 lots by 12 p.m. EST (1700 GMT). Final volume on Friday hit 23,645 lots.
* Open interest jumped 3,899 lots to 80,870 contracts open as of Jan. 9.
* Copper surrendered overnight gains amid concerns about the likelihood of any near-term Chinese government controlled purchases of copper for its reserves due to the recent price spike - analysts.
* Last month the SRB considered buying 700,000 tonnes of copper from three smelters, including Jiangxi copper, and later invited large smelters and trading houses for a 200,000-tonne bidding round out of a 500,000-tonne purchase plan. [ID:nHKG115885]
* OptionsXpress' Kurzatkowski believed the Chinese government was in a comfortable situation right now, where they could come in and pick their spots to buy.
* Since the start of the year, COMEX copper has rallied more than 15 percent on the back of fund buying and short-covering ahead of reweighting of the Dow Jones AIG Index .DJAIG and S&P GSCI .SPGSCI. [ID:nL566176]
* Copper's bearish tone linked to another large build in London Metal Exchange-monitored warehouse stocks - analysts.
* LME copper stocks saw another 5,925 tonnes enter warehouses on Monday, bringing total inventory levels to 369,500 tonnes, their highest in 5 years.
* COMEX copper stocks fell by 87 short tons to 35,257 short tons as of Friday.
* COMEX copper net short position at 19,689 lots in week ended January 6, from 19,445 lots the previous week.
* COMEX copper could be vulnerable to another short-covering rally due to the rather large net short position - John Reade, metals analyst with investment bank UBS.
* But, China's potential suspension of copper purchases and the end to the buying for the index rebalancing on Wednesday could place renewed short-term pressure on the metal, which would remove the impetus to cover short positions - Reade.
* London Metal Exchange copper for three months delivery MCU3=LX ended down $150 at $3,250 a tonne, up slightly from an early low at $3,196. (Reporting by Chris Kelly; Editing by David Gregorio)
