BLBG: Copper Prices Tumble to Two-Month Low as U.S. Job Losses Climb
By Anna Stablum and Millie Munshi
Oct. 2 (Bloomberg) -- Copper fell to the lowest price in two months after a report showed U.S. job losses accelerated in September, signaling slowing growth and contracting demand for the metal used in pipes and wires.
Employers cut 263,000 positions last month, the U.S. Labor Department said. Losses were forecast at 175,000, the median of 84 estimates in a Bloomberg News survey. The jobless rate climbed to 9.8 percent, the highest level since 1983. Copper slid to a fifth weekly loss, the longest slump in more than a year, on signs that the global recovery is stalling.
“The economic data is showing a situation that is clearly not supportive for copper,” said William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. “In the fourth quarter, copper will continue to fall.”
Copper futures for December delivery sank 5.55 cents, or 2 percent, to $2.6815 a pound on the New York Mercantile Exchange’s Comex division, dropping 2.2 percent for the week. Earlier, the price touched $2.64, the lowest since Aug. 3.
Prices also fell as inventory levels spurred concern that demand may be diminishing.
The U.S. Dollar Index, a six-currency gauge of the greenback’s performance, pared an earlier drop of as much as 0.7 percent to close in on a second weekly advance. A rise would make the metal more expensive for holders of other currencies. Copper stockpiles in warehouses monitored by the LME posted a 12th weekly increase, swelling 34 percent since July 14.
Slowing Demand
“Consumption levels are at a low ebb, as everything is pretty much slower, but this was masked by the weakness of the dollar throughout the summer,” Alex Heath, head of industrial- metals trading at RBC Capital Markets, said from London. “We are not seeing the appropriate pickup in either restocking or actual demand. Stocks are all going up, and it gives you the story that the markets are still oversupplied.”
Copper for three-month delivery fell $90, or 1.5 percent, to $5,895 a metric ton ($2.67 a pound) on the London Metal Exchange. Trading volume by late in the session was less than half of the average in the past year.
In China, markets were closed for a holiday and won’t reopen until Oct. 8.
“With the absence of China, it is not surprising that people don’t want to play, and a lot of the bigger players are sidelined,” RBC’s Heath said. “The metals are under pressure and are testing recent lows again.”
Among other LME metals for three-month delivery, lead, aluminum, nickel and zinc prices fell. Tin was unchanged.
To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.netMillie Munshi in New York at mmunshi@bloomberg.net.
