Washington (Platts)--28Apr2009

COMEX copper futures moved more than 5 cents lower Tuesday morning behind
weaker trade in London as traders once again took cues from sagging equity
markets and the potential impact of the swine flu outbreak.

Copper for May delivery, which will become the new spot contract after
Tuesday, was down 5.15 cents/lb at 193.50 cents/lb at 10:15 am EDT after
opening 6.75 cents lower. The more heavily traded July contract was down 5.05
cents also at 193.50 cents.

Three-months copper on the London Metal Exchange remained at the previous
day's close of $4,350/mt through the second ring but later tumbled below
$4,200. Copper stocks in LME warehouses fell a net 5,000 mt overnight to
420,275 mt, while cancelled warrants jumped by 2,525 lots to 70,125 mt.

In addition to worries about the impact of the swine flu pandemic,
traders were also concerned about unconfirmed reports suggesting that recent
US government "stress tests" may have revealed that Bank of America and
Citigroup may need to raise more capital based on their troubled balance
sheets, analysts said.

Technical analysts with UK commodities brokerage MF Global said they were
heartened by the recovery in LME three-months Monday to the $4,300 trend line.
But a close below the $4,300 level will mark a break with the upchannel that
has been in place since February, analysts said.

"We thought there was some technical selling through $4,230, which was
sparked by a selloff in equities caused by a mixture of the swine flu
pandemic and a report about Bank of America and Citigroup possibly having to
raise more cash," one European analyst said.
--Nick Jonson, nick_jonson@platts.com