The Wall Street Journal reports, "Copper futures pared earlier losses Monday as stronger U.S. equities partially offset worries about lower metal demand from China following rapid declines in the yuan.
The most actively traded contract, for March delivery, fell two cents, or 0.6%, to settle at $3.2400 a pound on the Comex division of the New York Mercantile Exchange.
The S&P 500 stock index rose to fresh all-time highs on Monday, giving copper futures a helping hand. The index rose as high as 1858.71, and if it closes above 1848.48, it would mark the 47th record high over the past 12 months. Copper and U.S. equities tend to move in the same direction as both assets are sensitive to shifts in economic outlook".
"A strong stock market generally speaks of better demand for commodities, and lends a bit of support to copper," said Frank Lesh, a broker and futures analyst with FuturePath Trading.
Mr. Lesh said that some traders likely took the opportunity to buy copper at the cheapest level in over a week after futures fell to $3.2260.
"There was likely some bargain hunting today," he said.
A gauge of German business confidence rose in February, pointing to cautious optimism in Europe's largest economy. The Ifo Institute's business confidence index climbed to 111.3 from an unrevised 110.6 in January, hitting its highest level since July 2011.
That data, along with a Federal Reserve Bank of Dallas report showing manufacturing activity in the Texas area held steady in February, offered some reprieve to copper's losses. Prices had traded at an intraday low of $3.2260, the lowest level since Feb. 13.
The U.S. is second behind top copper consumer China in global demand, but cedes that spot to Europe when the latter is considered as a region.
Still, many copper traders remained focused on China, after the yuan hit a four-month low against the dollar. China accounts for about 40% of the world's copper consumption, and a weaker domestic currency could curb factories' ability to buy the raw material, which is traded in dollars.
"There's a lot of fear about a slowdown in China," Mr. Lesh said.
