NEW YORK, Feb 24, 2011 (Dow Jones Commodities News via Comtex) -- Stronger U.S. durable goods data and an improving labor market helped copper to its first gain in four sessions.
The stronger economic data boosted the industrial metal despite continued increases in oil prices, which have been weighing on prices.
The most actively traded copper contract, for March delivery, rose 5.1 cents, or 1.2%, to settle at $4.3265 a pound on the Comex division of the New York Mercantile Exchange.
"We're slowing down the panic pricing," said Sterling Smith, market analyst at Country Hedging in Minnesota. "Most of the bearishness will shake itself out."
Copper had dropped 4.6% to a one-month low Wednesday as investors fretted that the rising crude prices could hurt consumer spending and ultimately slow down the recovery of the U.S. economy. Copper prices are tightly correlated to the performance of the economy because the metal is widely used to manufacture wires, pipes and sheets for electronics, appliances, automobiles and buildings.
Stronger-than-expected numbers on durable goods orders and jobless claims Thursday helped snap the metal's losing streak even though U.S. oil futures topped $100 amid unrest in key exporter Libya. The oil price later fell back under the burden of robust petroleum inventories in the U.S., further boosting copper.
Orders for durable goods, which are designed to last at least three years, rose 2.7% to a seasonally adjusted $200.55 billion, the Commerce department said Thursday. Economists expected a 2.0% gain.
Meanwhile, the number of U.S. workers filing new claims for unemployment benefits fell by 22,000 to 391,000 in the week ended Feb. 19, slipping below 400,000 for the second time this month. Economists expected a decline of just 5,000 to 405,000.
"The data stream continues to be constructive for base metals," said Matt Zeman, head of trading at LaSalle Futures Group in Chicago.
As recovering economies eat up more of the metal and mine supplies remain constrained, analysts are forecasting a copper-market deficit of up to 825,000 tons this year.
That view, and a recovering appetite for riskier assets like industrial commodities and equities, helped send copper to an intraday record of $4.6495 earlier this month before it began to sell off as traders booked profits, warehouse inventories rose substantially and the Middle East tension boosted oil prices.
On Thursday, the Middle east tumult also helped push the U.S. Dollar lower, further supporting copper prices by making the dollar-denominated metal less expensive for foreign buyers, helping demand.
Inventories of copper stored in London Metal Exchange warehouses rose 975 metric tons Thursday, leaving them at 412,675. The most recent Comex inventory data, released late Wednesday afternoon, were up 473 short tons at 81,153 short tons.
Copper settlements (ranges include electronic and pit trading):
Mar $4.3265; up 5.10 cents; Range $4.2255-$4.3330
May $4.3435; up 5.20 cents; Range $4.2435-$4.3495