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METALS-Copper slips as dollar gains after U.S. data, demand eyed
November 2, 2012 / 10:41 AM / 5 years ago

METALS-Copper slips as dollar gains after U.S. data, demand eyed

* U.S. nonfarm payrolls up 171,000 in Oct, consensus 125,000
    * Dollar up against the euro after U.S. jobs data
    * Euro zone manufacturing shrinks for 15th month in Oct

    By Harpreet Bhal
    LONDON, Nov 2 (Reuters) - Copper fell on Friday, on course for the
fourth weekly drop, pressured by concerns about demand from top consumer
China and as better-than-expected U.S. labour market data pushed the
dollar higher.
    U.S. employers stepped up hiring in October and the jobless rate
ticked higher as more workers restarted job hunts, a hopeful sign for a
lacklustre economy. 
    Shortly after the data was released the dollar rose to a three-week
high against the euro putting more pressure on already weaker base
metals prices.
     A strong dollar makes commodities priced in the U.S. unit more
expensive for holders of other currencies. 
    Three-month copper on the London Metal Exchange closed at
$7,665.50 a tonne in official rings, down 2 percent from Thursday's
close of $7,826 a tonne. 
    Despite the positive labour market data, recent economic figures
continue to point to fragile growth in the global economy, raising
uncertainty about the outlook for industrial metal demand. 
    In the euro zone, manufacturing shrank for the 15th month running in
October as output and new orders fell, a survey showed on Friday, likely
fuelling expectations of further easing from the European Central Bank.
    "I still think there is a lot to be concerned about. We have seen
quite a significant retrenchment in industrial metals prices over the
last six weeks and I think that could have further to run over the
remainder of the year," said Ross Strachan, economist at Capital
    "In China... we are still seeing very high stock levels at the
moment especially in copper and aluminium. So even if there is an upturn
in end-use demand, I don't think that is going to feed through
immediately into additional units of metal demand." 
    Copper prices rallied nearly 8 percent in September, fuelled by the
third round of quantitative easing (QE) by the U.S. Federal Reserve, the
promise of bond buying by the European Central Bank (ECB) and stimulus
measures in Japan and China. 
    The metal then weakened in October, falling more than 5 percent, as
expectations that real demand for metals would improve failed to

    In China, the world's largest consumer of copper, concerns remained
about the outlook for demand which has remained sluggish this year. 
    "Overall, investors are bearish about copper due to weak physical
demand in China, which many thought should have improved by now," said a
Shanghai-based trader.   
    "While we may see prices inch down gradually in the near term, I
doubt we will see a deep plunge this year since the economic data out of
China and the U.S. have been encouraging." 
    In industry news, Japan Pan Pacific Copper sold 120,000
tonnes of copper to China under a 2013 term contract at $85 premium,
sources said. 
    In other metals, nickel closed at $15,970, from Thursday's
close of $16,350. 
    Aluminium finished at $1,925 a tonne from Thursday's close
of $1,940. 
    "Prices could see another $10-15 on the upside, but we would
recommend selling into strength given the market's creaky fundamentals,"
ANZ said in a note. 
    Lead ended at $2,095 from $2,126.50, tin at $20,160
from $20,375 and zinc at $1,874 from Thursday's close of $1,889.
 Metal Prices at 1624 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2011   Ytd Pct
  COMEX Cu       348.00       -7.20     -2.03     344.75      0.94
  LME Alum      1926.50      -13.50     -0.70    2020.00     -4.63
  LME Cu        7668.00     -158.00     -2.02    7600.00      0.89
  LME Lead      2091.25      -35.25     -1.66    2034.00      2.81
  LME Nickel   15980.00     -370.00     -2.26   18650.00    -14.32
  LME Tin      20150.00     -225.00     -1.10   19200.00      4.95
  LME Zinc      1870.00      -19.00     -1.01    1845.00      1.36
  SHFE Alu     15360.00       25.00     +0.16   15845.00     -3.06
  SHFE Cu*     56610.00     -460.00     -0.81   55360.00      2.26
  SHFE Zin     14840.00        0.00     +0.00   14795.00      0.30
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07

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