Copper Futures Decline as U.S. Job Cuts Spur Economic Concerns

LONDON, July 3 -- Copper prices dropped after a report showed U.S. employers cut more jobs than forecast in June, increasing concern that global growth will continue to slow.

    The U.S. lost 467,000 jobs last month and the unemployment rate rose to 9.5 percent, the highest since August 1983, the Labor Department said today. Payrolls were forecast to drop by 365,000, according to the median of 79 estimates in a Bloomberg News survey.

    "Copper is down with the overall weakness being seen in many markets coming from the jobs report," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "There's less confidence that the expansion is going to take hold."

    Copper futures for September delivery fell 2.5 cents, or 1.1 percent, to $2.3055 a pound on the Comex division of the New York Mercantile Exchange. The most-active contract dropped 0.2 percent this week.

    A gain by the dollar eroded demand for metals and other commodities. Copper also dropped amid signs that China, the biggest consumer, will buy less.

    The dollar rose as much as 0.9 percent against a basket of six major currencies. Barclays Capital said Chinese imports of copper and copper in concentrate will fall by 900,000 tons to 1.6 million tons in the second half from the first.

    Copper has surged 64 percent this year, partly because China boosted inventories, absorbing surplus supplies as global demand eased.

    'Vulnerable' Prices

    "The problem remains in the oversupply that we have in many of these markets, and as long as demand is not picking up more decisively, prices are vulnerable," said Eliane Tanner, an analyst at Credit Suisse Group in Frankfurt. "Commodities are keeping an eye on the dollar."

    On the London Metal Exchange, copper for delivery in thee months fell $52.50, or 1 percent, to $5,035 a metric ton ($2.28 a pound).

    On the LME, aluminum declined 1.4 percent to $1,640 a ton. Nickel dropped 0.3 percent to $16,450. Lead fell 2.2 percent to $1,700. Zinc slid 1.4 percent to $1,572. Tin was down 1.4 percent to $14,300.

    (Source: Bloomberg)