METALS-Copper falls heavily on weak US jobs, factory data
* US jobless claims' surprise jump suggests slower growth
* Contracting factory data spurs worries over metal demand
* China data possibly more important than U.S. for metals
* Aluminium cash to 3-month contango narrows to about $2/T
(Recasts with New York closing prices)
By Carole Vaporean and Michael Taylor
NEW YORK/LONDON, Aug 19 (Reuters) - Copper prices fell from a two-week high on Thursday after a surprise surge in jobless claims data and a slide in regional factory activity in the United States stoked concerns about global demand for industrial metals.
In the aluminium market, significant long positions amounting to 30 to 40 percent of warrants on London Metal Exchange stocks and cash contracts attracted attention by market participants. [ID:nLDE67H16C]
Benchmark copper CMCU3 on the LME closed at $7,309 a tonne from $7,390 on Wednesday. The metal used in power and construction earlier touched $7,496 a tonne, its highest since Aug. 5.
In New York, copper for September delivery HGU0 finished down 3.10 cents, or 0.93 percent, at $3.3185 per lb on the COMEX metals division of the New York Mercantile Exchange. The early range ran up to $3.39, its highest since Aug. 9.
Copper prices gained early as the euro firmed and investors anticipated a raft of stronger U.S. economic reports. But when instead they came in sharply lower, copper swiftly turned down.
"Copper came off in response to jobless claim, Philly Fed, leading indicators. But I would say there is still some support," said metals analyst Justin Lennon at Mitsui Bussan Commodities (U.S.A.).
First, new claims for unemployment benefits in the world's largest economy unexpectedly climbed to a nine-month high last week, though a sizable decline was expected. [ID:nN19350083]
Later, factory activity in the U.S. Mid-Atlantic region contracted surprisingly in August to its lowest level in more than a year, which heightened worries over sustainability of the economic recovery. [ID:nN19254823]
While the index of leading economic indicators, a key gauge of the U.S. economy's prospects, came in as projected in July, June was revised lower, pointing to a "slow expansion through the end of the year. [ID:nN19230939] [ID:nWALIJE6HB]
"We had that poor U.S. employment data," said David Wilson, director of metals research at Societe Generale. "The market can disregard some data and pick others. Typical in August, we will see choppy ups and downs according to whatever data flows are coming out."
While copper sold off fairly heavily after the weak reports, Mitsui's Lennon pointed out that it had pulled up from the lows by the close on merely modest volume. He also noted that metals purchases were more robust in other geographic regions and that other economic data had shown bright spots.
Investors in recent days have been more positive about prospects for industrial metals, but traders say buying has been sporadic and not as strong as earlier this year. Some add, however, the slower selling pace could be due to seasonal factors like holidays and plant shutdowns for retooling.
The current quarter is also seasonally slack for metals demand as activity slows in construction, particularly in China. The country is the world's largest consumer of copper, accounting for more than 30 percent of the market.
Despite attempts by China's government to slow growth and rein in price pressures, expectations are for strong growth and industrial metal demand. ECONCN
"Chinese economic data are becoming very important for metals, more so than U.S. data," a metals trader said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For double-dip graphic click:
Three-month aluminium CMAL3 ended at $2,066 a tonne from $2,107 on Wednesday. Used in transport and packaging, the metal earlier hit a three week low at $2,058.
Worries about supplies because of large holdings by two entities have narrowed the discount for cash material against the three-month contract to around $2 a tonne, a level last seen in 2007, from levels near $30 a tonne in June. MAL0-3
Also unusual is the premium for material for delivery on Friday against material for delivery on Monday, known as tom/next and often used as way to lend metal to cover short positions. CMALT-0 <LME/FB2>
Tom/next aluminium is trading at a premium or backwardation around $6 a tonne. On Wednesday the range was flat to $9 a tonne. These are the highest levels since early 2007.
This backwardation is expected to attract metal to LME warehouses, despite a 5,100 tonne fall to 4.464 million tonnes as of Wednesday. On Monday and Tuesday more than 91,000 tonnes were delivered to LME warehouses.
Zinc MZN3 closed at $2,090 a tonne from $2,135 on Wednesday; lead MBP3 at $2,105 a tonne from $2,122.50; tin MSN3 at $21,100 from $21,000; and nickel MNI3 at $21,795 a tonne from $21,900 previously.
Metal Prices at 1936 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Prices at 1536 EDT Metal Last Change Pct Move End 2009 Ytd Pct
move COMEX Cu 332.05 -2.90 -0.87 334.65 -0.78 LME Alum 2065.00 -42.00 -1.99 2230.00 -7.40 LME Cu 7315.00 -75.00 -1.01 7375.00 -0.81 LME Lead 2090.00 -32.50 -1.53 2432.00 -14.06 LME Nickel 21650.00 -250.00 -1.14 18525.00 16.87 LME Tin 21050.00 50.00 +0.24 16950.00 24.19 LME Zinc 2100.00 -35.00 -1.64 2560.00 -17.97 SHFE Alu 15510.00 10.00 +0.06 17160.00 -9.62 SHFE Cu* 58260.00 220.00 +0.38 59900.00 -2.74 SHFE Zin 17580.00 140.00 +0.80 21195.00 -17.06 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Additional reporting by Pratima Desai; Editing by Lisa Shumaker)
- Tweet this
- Share this
- Digg this