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Falling US Builder Confidence Harms Copper & Lumber Prices

February 19, 2013 at 21:59 by Vladimir Vyun

Copper fell today as confidence of US home builders deteriorated. Lumber also suffered. The National Association of Home Builders reported that its Housing Market Index fell from 47 to 46 in February, while analysts have expected an increase. A value below 50 indicates a negative outlook. The report commented on the decline:

This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens.

Still, the reading was near the highest level in several years and experts expect the US housing market to continue improving.

Futures for delivery of copper in May tumbled as much as $0.0820 (2.18 percent) to $3.6715 per pound as of 21:51 GMT on COMEX today. Contract for lumber sank 2.5 percent to $389.70 per 1,000 board feet on CME.

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