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BASE METALS: Copper Eases On Jobless Claims, Trichet Comments
Sep 9,2011 10:01CST
industry news
Source:SMM
Copper futures fell slightly Thursday due to weaker-than-expected reading on the U.S. labor market and downbeat comments from the European Central Bank chief.

Sep 08, 2011 NEW YORK (Dow Jones)--Copper futures fell slightly Thursday as a weaker-than-expected reading on the U.S. labor market and downbeat comments from the European Central Bank chief reinforced concerns about slowing growth that may curb metals demand.

Copper for December delivery, the most actively traded contract, was recently down 2.05 cents, or 0.5%, at $4.1115 a pound on the Comex division of the New York Mercantile Exchange.

The Labor Department said the number of people claiming new jobless benefits in the U.S. rose by 2,000 last week, to 414,000, the latest sign that a persistently weak labor market continues to drag on the world's largest economy. Economists had expected an increase of 1,000. The previous week's claims were revised higher, to 412,000, from the 409,000 originally reported.

Copper also came under pressure as ECB President Jean-Claude Trichet said the bank had cut its euro-zone growth forecasts, and that risks to the economic zone "are on the downside."

Copper is sensitive to such economic factors because of its widespread uses in construction and manufacturing. Recent signs of a slowdown in the global economy, and in manufacturing in particular, have held the attention of the copper market, as traders place bets based largely on outside markets rather than the copper supply and demand picture.

Analysts say quiet trading is likely ahead of speeches by Federal Reserve Chairman Ben Bernanke and President Barack Obama scheduled for Thursday. Bernanke is scheduled to speak in Minneapolis at 1:30 p.m. EDT, and Obama is set to address Congress at 7 p.m. EDT.

Workers at Peruvian mining company Sociedad Minera Cerro Verde Wednesday began a two-day strike to demand higher wages. Union leaders have said that an indefinite strike is possible later this month if its demands are not met.

Cerro Verde is majority owned by Freeport-McMoRan Copper & Gold Inc. (FCX).

Though Freeport has said it doesn't anticipate a material impact on production from the Cerro Verde strike, "it is less clear how production loss could be averted if a longer strike action is taken," analysts with Barclays Capital said in a note.

Copper has drawn support for much of this year from the view that rising demand from China and other emerging economies would outpace mine supply growth. Lost production in top miner Chile because of labor strikes and severe weather helped pushed copper futures near $4.50 a pound in July, before worries mounted about the health of the global economy and dragged futures below $4 a pound.

 

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