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Copper’s Slide Continues On Perceieved Easing Of Supplies

February 3, 1989

Undated (AP) _ Copper futures prices fell markedly Friday, the fourth significant decline in the last five trading sessions, on perceptions of easing labor tensions in several copper-producing countries and expectations of an increase in supplies.

On other markets, precious-metals futures prices rose; agricultural futures were mostly higher; and energy futures retreated.

Copper settled 1.35 cents to 2.50 cents lower on New York’s Commodity Exchange, with the contract for delivery in March at $1.3235 a pound.

The spot February contract finished at $1.34 a pound, the lowest spot copper price on the Commodity Exchange since Oct. 13 and more than 30 cents below the record high of $1.6475 a pound reached on Dec. 8.

The March contract lost nearly 10 percent of its value during the past week. The setback was largely a reaction to labor settlements that averted refinery strikes in Chile, Peru and Mexico.

″Not only were these (labor problems) resolved, they were resolved in a very short period of time, and that caught a lot of people off guard,″ said Bernard Savaiko, an analyst in New York with PaineWebber Inc.

The dollar’s strength during the week, effectively raising the price of U.S. goods to foreign buyers, also weighed on copper prices, analysts said.

But experts said demand for copper remained strong and at least one analyst cautioned that labor tensions in Chile and Peru have not disappeared.

″You can always bandage a cut, but if you have internal hemorrhaging you can still die,″ said George Anagnos of Thomson McKinnon Securities Inc.

Gold and silver futures posted modest gains on the Commodity Exchange in lackluster trading.

Gold settled 40 cents to 80 cents higher with April at $396.30 a troy ounce; silver was 1.2 cents to 1.3 cents higher with March at $5.875 a troy ounce.

Wheat and soybean futures closed moderately higher on the Chicago Board of Trade in late buying partially prompted by a report that the Soviet Union had ordered the evacuation of 20 villages contaminated by radiation from the 1986 Chernobyl nuclear accident.

The wire-service report said residents of the unidentified Ukrainian farming communities had not previously been informed of the radiation leak and had been living and growing crops in highly contaminated soil.

The Chernobyl incident sparked a sharp rise in U.S. grain futures in 1986 on fears of widespread contamination of Soviet crops.

No new radiation leakage was reported on Friday ″but when you start hearing rumors of leakage of radiation, people start thinking ‘Chernobyl’ and ’Are we going to have another incident,‴ said Jerry Zusel, manager of floor operations for Balfour Maclaine Corp. at the Chicago Board of Trade.

Corn futures closed mixed while oats were slightly higher.

Wheat settled 3/4 cent to 3 cents higher with March at $4.30 1/4 bushel; corn was 1 1/4 cents lower to 1 1/2 cents higher with March at $2.71 3/4 a bushel; oats were 1 3/4 cents to 2 1/2 cents higher with March at $2.18 3/4 a bushel; soybeans were 5 cents to 10 1/4 cents higher with March at $7.70 1/2 a bushel.

The arctic cold front chilling the nation’s midsection prompted new buying of livestock and meat futures on the Chicago Mercantile Exchange in anticipation of weight losses and possibly some livestock deaths.

Live cattle settled .18 cent to .48 cent higher with February at 75.55 cents a pound; feeder cattle were .02 cent lower to .20 cent higher with March at 84.65 cents a pound; live hogs were .28 cent to .62 cent higher with February at 44.02 cents a pound; frozen pork bellies were .80 cent to 1.80 cents higher with February at 40.82 cents a pound.

Energy futures prices slipped on the New York Mercantile Exchange in thin trading.

West Texas Intermediate crude oil settled 20 cents to 46 cents lower with March at $17.53 a barrel; heating oil was .24 cent to .54 cent lower with March at 50.31 cents a gallon; unleaded gasoline was .45 cent to 1.10 cents lower with March at 49.17 cents a gallon.

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