Jul 06, 2012 (Dow Jones) NEW YORK--A weak reading on the U.S. labor market and continued concern about the economy of top metals importer China after this week's surprise rate cut pushed copper futures to a more than one-week low on Friday.
Copper for September delivery, the most actively traded contract, fell 8.35 cents, or 2.4%, to settle at $3.4095 a pound on the Comex division of the New York Mercantile Exchange, the lowest settlement since June 28. During the week, futures fell 2.5%.
Copper is sensitive to shifts in the economic outlook because of its widespread uses across industries, including appliances, power cables and consumer electronics.
"The big concern in these industrial commodities is that the demand outlook looks poor," said Bill O'Neill, principal with commodities advisory and trading firm Logic Advisors. "Looking into the second half of the year, things don't look too rosy."
The U.S., a bright spot in the global economy at the beginning of the year, had helped prop up copper prices. But a series of recent readings on hiring and manufacturing in the world's largest economy suggested that growth may be stalling. That trend continued on Friday, with the Labor Department reporting that the U.S. economy added fewer jobs than expected in June.
Copper was already in negative territory ahead of the report due to investor jitters a day after some central banks took steps designed to support economic growth.
China surprised market participants with an interest rate cut, sparking worries that the economy in the world's top copper consumer was growing more slowly than feared. China accounts for about 40% of global copper use.
Sentiment on the ground in China "is still distinctly bearish," analysts with Barclays said on Friday in a note, adding that demand in June appeared to be below the investment bank's previous expectations.
The European Central Bank, the Bank of England, and others on Thursday also announced steps to ease monetary policy in an effort to support growth. But that failed to support commodities prices, as investors doubted that the monetary policy moves would be sufficient to stoke raw materials demand any time soon.
Copper settlements (ranges include electronic and pit trading):
Jul $3.4045; down 8.35 cents; Range $3.4045-$3.4955
Sep $3.4095; down 8.35 cents; Range $3.4060-$3.5050