(Reuters) - Copper fell to a one-week low on Friday after
weaker-than-expected U.S. jobs data increased uncertainty about
economic growth, but tight supplies of the metal outside
kept losses in check.
Benchmark copper on the London Metal Exchange slipped to its
lowest level since April 26 in intraday trade at $8,192 a metric
ton (1.1023 tons), before recovering to $8,222 a ton at 9.25 a.m.
EDT, from a close of $8,229 a ton on Thursday.
U.S. employers slowed the pace of hiring for a second straight
month in April, and a fall in the unemployment rate to 8.1
percent was due to the exit of a large number of Americans from
the labor force. Nonfarm payrolls rose by 115,000 in April, the
Labor Department said, against a forecast of 170,000.
"The macro numbers are becoming worse, especially in the U.S.,
so it's going to be difficult for a lot of these metals to hold
up," Edward Meir, an analyst at INTL FCStone, said.
"The French elections will also be important, because then the
euro might move on that and give the market a bit more
direction," he said, referring to polls over the weekend.
Market players said they expect large Chinese copper smelters
and trading firms to export refined copper cathodes to
LME-registered warehouses over the next two months to help ease
tight global supplies and trim near-record stockpiles at
As a result, thousands of tons of refined copper could go into
LME warehouses, boosting inventories and slashing steep premiums
of spot prices over those for later deliveries.
"Copper might get down to $7,800 a ton during the course of
the month. The $8,000 level keeps holding up, but this level
could break once the stock picture changes. If you start seeing
accumulations for a few days in a row, then that's when the
pressure will be on," Meir said.
Inventories of copper in warehouses monitored by the Shanghai
Futures Exchange fell 4.0 percent from last Friday to their
lowest since February, data showed. Copper stocks in
LME-monitored warehouses also fell, reaching their lowest since
Investors were balancing this with supply tightness worries as
Chile once again struggled with lower-than-expected copper
production and labor action, which heightened risks to
A protest took place this week at Chile's giant Escondida
copper mine, the world's largest, as a group of contract workers
blocked some roads to the deposit in a dispute over bonuses.
Although majority owner BHP Billiton (
) said on Thursday output had not been affected, worries
"People are skeptical of miners' comments as producers always
tend to underestimate production disruption. They said the same
last year and then they actually were impacted," Credit Suisse
analyst Ivan Szpakowski said.
Also highlighting supply scarcity, first-quarter copper
production at Chilean miner Antofagasta (
) fell 13 percent on the previous three months amid rising
development costs, the London-listed firm said.
"With real demand in China now starting to increase and global
industrial output trending higher, the ability of supply to
respond is likely to drive relative performance in H2," Macquarie
said in a research note.
Aluminum was at $2,082.50 a ton from $2,089.50 and nickel was
at $17,451 from $17,275.
Both were supported by news that
will impose a new 20 percent export tax on 14 mineral ore exports
including copper, gold and nickel from Sunday and will prohibit
the shipment of raw minerals unless miners submit plans to build
This is likely to hit exports of nickel and bauxite to China
and push ore prices higher, an industry source said.
Zinc, used in galvanizing, was at $1,990 from Thursday's close
of $1,984, battery material lead traded at $2,085.75 from $2,092
and tin was at $21,750 from $21,805.
(Editing by Mike Nesbit and Jane Baird)
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