Sept. 5 (Bloomberg) –Copper declined for a third day amid stalling U.S. job growth and concern that Europe's sovereign- debt crisis will worsen, fueling fears that a weaker economy may reduce demand for industrial metals.
Three-month delivery copper on the London Metal Exchange fell as much as 0.9 percent to $8,990.25 a metric ton, the lowest level since Aug. 26, and traded at $9,000 at 4:12 p.m. Tokyo time. The metal earlier gained as much as 0.4 percent.
Asian stocks and oil fell for a second day, following the 2.5 percent slump in Standard & Poor's 500 Index futures on Sept. 2 after the U.S. Labor Department reported the weakest payrolls reading since September 2010. The Dollar Index headed for its longest winning streak in eight months, reducing the appeal of copper as a rise in the greenback makes metals priced in U.S. dollars more expensive to investors holding other currencies.
"In the short term, the copper market is under downward pressure from the weaker U.S. jobs data and mounting concern about Europe's sovereign-debt crisis, together with an increase in stockpiles in London and Shanghai," said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul.
LME copper stockpiles climbed 1,450 tons to 466,075 tons on Sept. 2, increasing for a second day. That was the highest level since Aug. 22.
In China, stockpiles monitored by the Shanghai Futures Exchange rose for the first time in three weeks. The inventories gained 5,532 tons to 107,790 tons, according to a survey of 10 warehouses in Shanghai, the bourse said Sept. 2. Stockpiles at bonded warehouses rose 1,151 tons to 17,604 tons.
Copper for November delivery on the Shanghai Futures Exchange fell 1.1 percent to 67,100 yuan ($10,505) a ton. Futures for December delivery dropped 1 percent to $4.0835 a pound on the Comex in New York.
Further declines may be limited by concern over tight supplies, such as lower concentrate grade and potential supply disruptions amid strong demand by China, Hwang said.
Freeport-McMoRan Copper & Gold Inc. (FCX)'s Peruvian copper miners plan to hold a two-day strike over benefits including pay increases starting Sept. 7, a union official said. Workers and officials at Freeport's Sociedad Minera Cerro Verde SAA unit will take part in government-brokered labor talks during the weekend in a bid to avoid the stoppage, Luis Castillo, general secretary of Peru's Mining Federation, said Sept. 3.
The global market will likely remain in short supply for a third straight year in 2012 on China-led demand. Demand may exceed supply by 495,000 tons in 2011, the biggest deficit since 2004 and compared with a 214,000-ton shortfall last year, said Akira Miura, executive officer of the marketing and raw-material department at Pan Pacific Copper Co., Japan's biggest producer. The shortage may shrink to 31,000 tons in 2012.
Aluminum was down 0.7 percent at $2,420 a ton and zinc was little changed at $2,197 a ton. Lead lost 0.5 percent to $2,447 a ton and nickel was down 0.7 percent at $21,357 a ton. Tin dropped 1.2 percent to $23,950 a ton.