Apr 09, 2012 NEW YORK (Dow Jones)--Copper futures settled down 2% Monday amid robust trading volumes, as traders in Asia and the U.S. reacted to Friday's weaker-than-expected U.S. employment data and an increase in China's inflation. Much of Europe remained closed for the Easter holiday.
The most-actively traded contract, for May delivery, fell 7.55 cents, or 2%, to settle at $3.7200 a pound on the Comex division of the New York Mercantile Exchange.
Data released Friday showed U.S. nonfarm payrolls rose by just 120,000 in March, missing forecasts of a 203,000 increase. This was the first time since November that the U.S. economy added fewer than 200,000 new jobs.
Economic "reports have been good in the U.S., but they haven't been able to beat expectations the way they did earlier this year," said Jimmy Tintle, a market analyst with GreenKey Alternative Asset Services.
Comex floor trading and Globex electronic trading were closed when the employment data were released Good Friday morning. Instead, traders had their first opportunity to react to the news Sunday evening, when Globex reopened for Asian trading hours.
Trading on the London Metal Exchange, Europe's metal trading hub, remained closed Monday in observation of Easter. LME traders are due to return to the trading ring Tuesday.
Metal prices faced additional pressure from data showing China's consumer inflation picked up pace in March, climbing 3.6% from a year earlier. However, the inflation figure was still within the government's target of keeping price rises at about 4% for all of this year, and this should put policy makers in China in a generally positive mood.
China is the world's largest consumer of copper, accounting for about 40% of global demand. However, inflation concerns have led to tight credit policies that restrict manufacturers' ability to buy the metal.
Commodity traders now have their sights set on Federal Reserve Chairman Ben Bernanke's speech in Atlanta, to be delivered after markets close Monday. Markets have been hoping the Fed would embark on a third round of monetary easing to stimulate economic growth. Copper prices have benefited from such programs in the past, as greater economic activity boosts demand for the industrial metal while worries about potential inflation lure investors to stock up on hard assets such as commodities.
"Certainly Bernanke's comments can be a very big mover depending on what he says," said Matt Zeman, head of trading at Kingsview Financial.
Copper settlements (ranges include electronic and pit trading):
Apr $3.7160; down 7.65 cents; Range $3.7160-$3.7820
May $3.7200; down 7.55 cents; Range $3.7050-$3.7995