NEW YORK, Aug 05, 2011 (Dow Jones Commodities News via Comtex) -- Copper extended its losses Friday, as concerns about U.S. growth and government debt problems in Europe overshadowed a better-than-expected U.S. jobs report.
Copper prices are considered a bellwether of economic growth, as the metal is used in everything from laptops and air-conditioners to cars and demand for such goods tends to erode when economic growth stalls.
The most actively traded contract, for September delivery, settled down 11.85 cents, or 2.8%, at $4.1170 a pound on the Comex division of the New York Mercantile Exchange.
Thinly traded August-delivery copper fell 11.80 cents, or 2.8%, to settle at $4.1130 a pound.
The Dow Jones Industrial Average orbited the unchanged level, setting fresh lows for the year, as investors wavered between fears over slow growth and relief in the wake of better-than-expected employment data.
The U.S. economy added 117,000 jobs in July, beating expectations of a 75,000 increase, while the unemployment rate fell to 9.1% from 9.2% in June.
Copper futures struggled to pare losses on the data, as market participants remain concerned that the global economy is slowing and demand for the metal will soon deplete.
"When you look at a metal like copper and its pure industrial use, it's not ready to make the turn and start working its way back up," said Scott Meyers, analyst with Pioneer Futures.
Investors have been increasingly worried that economic growth in the U.S. and Europe is in decline as a string of weak manufacturing data stoked fears of a so-called double-dip recession.
Moreover, Europe's sovereign debt problems remain in traders' cross hairs as larger euro-zone economies like Italy and Spain are under pressure to rein in their debts and spending.
"Copper is very economically sensitive, because when the economy slows nobody is building or buying computers," said Sterling Smith, analyst with Country Hedging.
Adding to the downbeat tone, workers at the world's largest copper mine, Escondida in northern Chile, reached a wage deal Friday. The 15-day long strike had stalled copper output, sparking concern about global supply and giving copper prices a boost. Escondida accounted for almost 7% of global copper production last year.
Copper prices have drawn support from a string of production disruptions at major copper mines in recent weeks. Copper mine output has struggled to keep up with growing global demand for the industrial metal and many analysts are forecasting a production shortfall for both 2011 and 2012.
Sustained copper demand from top consumer China also has kept copper prices buoyed above the $4 level for much of this year.
"These are still very high prices that reflect exceptionally global demand, and that isn't going to change any time soon, but that doesn't mean prices go up uninterrupted," said Mike Frawley, global head of metals for Newedge Group.
Copper settlements (ranges include electronic and pit trading):
Aug $4.1130; down 11.80 cents; Range $4.0825-$4.2200
Sep $4.1170; down 11.85 cents; Range $4.0795-$4.2265