Copper Little Changed as Unemployment Drop Helps Demand Outlook

By Bloomberg News

Dec. 7 (Bloomberg) -- Copper was little changed after gaining as much as 0.4 percent as a decline in the U.S. unemployment rate signaled that an economic recovery was lifting the labor market out of the worst slump since World War II.

Payrolls declined by 11,000, figures from the Labor Department showed Dec. 4 in Washington, compared with the median forecast for a 125,000 decline in a Bloomberg News survey of 82 economists. The jobless rate fell to 10 percent.

“The better-than-expected U.S. unemployment data fueled optimism in the market that the U.S. economy is indeed recovering, which may help metals demand,” said Wang Lei, analyst at Haitong Futures Co. The metal used in construction and automobiles was also supported by a 0.2 percent decline in the dollar against the euro today, he said.

Copper for delivery in three months on the London Metal Exchange gained to $7,070 a metric ton before trading at $7,038 a ton at 1:03 p.m. Singapore time. March-delivery copper on the Comex division of the New York Mercantile Exchange dropped 0.8 percent to $3.2105 a pound.

March-delivery copper on the Shanghai Futures Exchange fell 0.5 percent to 55,660 yuan ($8,151) a ton. The metal rallied to 56,170 yuan on Dec. 3, the highest level since Sept. 5, 2008.

Eleven of 19 analysts, investors and traders surveyed by Bloomberg last week, or 58 percent, said copper would gain this week after stronger Chinese, U.S. and European manufacturing figures indicated recovering demand for industrial metals. Eight predicted lower prices.

Copper inventories gained in the LME and Shanghai to 446,075 tons and 104,710 tons last week, respectively, adding pressure to the market in the short term, Wang said.

Among other LME-traded metals, aluminum fell 0.5 percent to $2,138 a ton, zinc declined 0.2 percent to $2,365 a ton and lead dropped 0.5 percent to $2,354 a ton. Nickel was little changed at $16,005 a ton, while tin lost 0.5 percent to $15,200 a ton.

--Feiwen Rong. Editors: Wendy Pugh, James Poole

To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at +86-10-6649-7563 or frong2@bloomberg.net