By Leia Michele Toovey- Exclusive to Copper Investing News

A battery of economic data pulled copper in every direction this week; U.S. copper futures retreated from a near three week high Wednesday morning, as a mixed report from the housing sector boosted the greenback.  Consumer confidence sent copper on a rally Tuesday, overshadowing the weak US dollar and worries of shrinking Chinese demand. On the New York Mercantile Exchange’s COMEX division, copper’s morning range spanned $2.1070 to $2.1590, the contract’s highest level since May 8.

 The Conference Board’s Consumer Confidence Index was at 54.9 in May, its biggest monthly gain in six years. Good consumer confidence is important to the overall economy because two-thirds of the US economy is accounted for in consumer spending. A good portion of copper’s price is driven by purchases of manufactured goods and homes, therefore positive sentiment can rally the red metal.  

The pace of sales of existing homes in the United States rose 2.9 per cent to an annual rate of 4.68 million units in April. The inventory of existing homes for sale rose 8.8 per cent to 3.97 million Extended gains in the dollar versus the Euro from the rise in existing home sales data provided  additional weight to dollar-denominated copper prices.

LME warehouse stock levels shed another 7,300 tonnes on Wednesday. Canceled warrants, metal earmarked for delivery, dropped down to 43,375 tonnes from 47,625 tonnes the previous session. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 11 per cent to 30,217 tonnes in the latest week, from 33,798 tonnes last week. High levels of Chinese copper scrap imports might present risks if global demand continues to be hit by the financial crisis. Rising inventories of copper and slimming orders are a sign that Chinese demand is waning.   China’s State Reserves Bureau reportedly sold off a small volume of its contracted copper imports over the past month, and might sell an additional 50,000 tonnes.

Company News

African Copper believes it has satisfied all the claims made against it by mining investment firm Natasa Mining Ltd, and therefore is poised to restart mining. The AIM-listed miner said on Tuesday it has repaid $20.4 million to Natasa from the bonds issued by its Messina unit and has paid the investment firm a further $2.1 million in settlement for some of Messina’s debts. It has also repaid Natasa $1.5 million for a bridge loan. The company put its first copper mine, Mowana, on care and maintenance in January pending completion of financing talks. It rejected a takeover offer from Natasa, leaving the way open for rival bidder Zambia Copper Investments Ltd to provide a $22.5 million financing package for African Copper.  Zambia Copper also provided the miner with an additional $25.4 million after Natasa demanded immediate repayment of the Messina bonds earlier this month. News that the dispute was ending sent the company’s shares up 22 per cent.

Struggling Aussie miner OZ Minerals is boosting exploration work to speed expansion plans at its only remaining mine. “We will recommence our exploration that we have had to defer and we will complete our studies into future underground and expanded pit production,” Chairman Barry Cusack said today.  China Minmetals Group, the nation’s biggest metals trader, is seeking to complete the acquisition of OZ Minerals assets next month, giving it control of the world’s second-biggest zinc mine and supplies of copper, gold and nickel. Prominent Hill, the company’s only source of revenue, will be profitable “within days” once it receives payment for the first shipment of copper concentrate to India, Chief Executive Officer Andrew Michelmore told reporters. The company is drilling mineral targets as it seeks to discover sufficient resources to allow for an underground expansion of the mine, Michelmore said.

“We have to do a lot more drilling to be able to come to that assessment, so that will take some time and is why the cash we will have on hand will be very important,” he said, referring to the company’s cash balance of about A$700 million after the Minmetals sale. BHP Billiton, the world’s largest mining company, may be prepared to pay A$2.75 billion to buy Prominent Hill, located 650 kilometers from the state capital Adelaide, to secure copper and uranium for its adjacent Olympic Dam operation,  according to JP Morgan Chase & Co. BHP has previously bought concentrate from the mine to treat at Olympic Dam.