Copper Posts First Weekly Lose Since July as Inventories Gain

LONDON/NEW YORK, Sept. 7 -- Copper prices, little changed in New York, posted the first weekly decline since mid-July, as the U.S. jobless rate topped forecasts and inventories climbed, a sign of slowing demand.

    Stockpiles of copper monitored by the London Metal Exchange rose 0.6 percent today to 308,200 tons, the highest level since June 2. Including supplies tracked by New York and Shanghai exchanges, inventories are up 15 percent this year at 443,807 tons, according to data compiled by Bloomberg. U.S. unemployment reached a 26-year high of 9.7 percent in August.

    "With builds in the LME inventories and this morning's U.S. government report indicating the highest unemployment level since June 1983, copper bulls have little reason to push prices higher today," Ralph Preston, a Heritage West Futures Inc. analyst in San Diego, said by e-mail. "However, overall, the market is bullish."

    Copper futures for December delivery rose 0.15 cent to $2.8665 a pound on the New York Mercantile Exchange's Comex division. The most-active contract has more than doubled this year, while losing 2.8 percent this week.

    "Stable price action over $2.75 a pound should build a base for rallies to attack $3 resistance," Preston said.

    Economic Signals

    Copper fell as much as 1.1 percent earlier after reports yesterday dimmed the outlook for metals demand. One showed initial U.S. jobless claims topping forecasts and a second indicated U.S. service industries contracted for the 11th straight month.

    The rise in the unemployment rate, which economists were expecting at 9.5 percent, may also delay an economic rebound as consumers, concerned that they may lose their jobs, rein in spending.

    On the LME, copper for delivery in three months rose $20, or 0.3 percent, to $6,275 a metric ton, or $2.85 a pound.

    Any decline in copper is a "buying opportunity," Morgan Stanley said in a report, calling it "our preferred base metal." The bank's advice stems from a "relatively pessimistic view on Chinese production, a positive view on consumption growth, and the restraining effects of strategic inventory- buying on the apparent domestic market surplus."

    (Source: Bloomberg)