Copper retreats after weaker US jobs data
Sunday, 6 January 2008
LONDON, Jan 5 (Thomson Financial): Copper retreated from its earlier highs midafternoon after US non-farm payrolls data came in weaker than expected, fuelling fears of a slowdown in the US economy that is feared could crimp demand for metals.
According to figures released by the Labor Dept, the US economy created jobs at its slowest pace in more than four years in December, while the unemployment rate hit a level not seen in more than two years.
The economy added just 18,000 jobs in the final month of 2007, sharply lower than the 70,000 jobs economists polled by Thomson's IFR Markets had expected from the survey of employer payrolls.
The monthly gain is the smallest since Aug 2003, the low point of job creation when the economy lost 42,000 jobs, and is just a fraction of the 100,000 jobs the economy needs to keep up with new entrants to the workforce.
"The market holds the non-farm payroll data in high regard, so this worse-than-expected number is likely to undermine the better-than-expected jobs data yesterday," said BaseMetals.com analyst William Adams. "This could dampen the rally in base metals."
At 1.51 pm, LME copper for three-month delivery was trading at 7,044 usd per tonne, down from an intraday high of 7,135 usd but up from 6,755 usd at the close yesterday.
Copper and nickel prices had moved higher this morning after a good showing from all the metals yesterday as the complex took support from the seasonal re-balancing of commodity indices, during which funds realign the proportions of assets they hold.
Strength in other commodities, such as gold, oil and platinum -- all of which have touched fresh all-time highs in recent days -- has also underpinned sentiment towards commodities as a whole, while rising prices have prompted some short covering.
Nickel was the major gainer this morning and stayed firmly in the black this afternoon, trading at 29,700 usd per tonne, basis three months, against 28,950 usd.
Nickel prices have gained around 9 pct in the last week, largely driven by New Year index rebalancing, analysts said.
But the other base metals posted declines. Three-month aluminium edged down to 2,493 usd from 2,505 usd, pressured by a 4,250 tonne rise in LME-monitored stocks, and a 15.56 pct increase in inventories monitored by the Shanghai Futures Exchange.
Meanwhile, tin eased to 16,595 usd per tonne, basis three months, from 16,800 usd and lead edged down to 2,655 usd per tonne from 2,670 usd.
Three-month zinc was down at 2,525 usd from 2,575 usd per tonne.
According to figures released by the Labor Dept, the US economy created jobs at its slowest pace in more than four years in December, while the unemployment rate hit a level not seen in more than two years.
The economy added just 18,000 jobs in the final month of 2007, sharply lower than the 70,000 jobs economists polled by Thomson's IFR Markets had expected from the survey of employer payrolls.
The monthly gain is the smallest since Aug 2003, the low point of job creation when the economy lost 42,000 jobs, and is just a fraction of the 100,000 jobs the economy needs to keep up with new entrants to the workforce.
"The market holds the non-farm payroll data in high regard, so this worse-than-expected number is likely to undermine the better-than-expected jobs data yesterday," said BaseMetals.com analyst William Adams. "This could dampen the rally in base metals."
At 1.51 pm, LME copper for three-month delivery was trading at 7,044 usd per tonne, down from an intraday high of 7,135 usd but up from 6,755 usd at the close yesterday.
Copper and nickel prices had moved higher this morning after a good showing from all the metals yesterday as the complex took support from the seasonal re-balancing of commodity indices, during which funds realign the proportions of assets they hold.
Strength in other commodities, such as gold, oil and platinum -- all of which have touched fresh all-time highs in recent days -- has also underpinned sentiment towards commodities as a whole, while rising prices have prompted some short covering.
Nickel was the major gainer this morning and stayed firmly in the black this afternoon, trading at 29,700 usd per tonne, basis three months, against 28,950 usd.
Nickel prices have gained around 9 pct in the last week, largely driven by New Year index rebalancing, analysts said.
But the other base metals posted declines. Three-month aluminium edged down to 2,493 usd from 2,505 usd, pressured by a 4,250 tonne rise in LME-monitored stocks, and a 15.56 pct increase in inventories monitored by the Shanghai Futures Exchange.
Meanwhile, tin eased to 16,595 usd per tonne, basis three months, from 16,800 usd and lead edged down to 2,655 usd per tonne from 2,670 usd.
Three-month zinc was down at 2,525 usd from 2,575 usd per tonne.