Copper declines

Copper fell on Friday after data showed US jobs growth braked sharply in June, quashing hopes that the pace of the world's largest economy was quickening, but disruptions to supply of the metal helped limit losses. Benchmark copper on the London Metal Exchange closed at $9,661, compared with $9,740 at Thursday's close.
Earlier, it hit $9,789.75, the highest since April 12, helped by forecasts that the jobs numbers would reflect a hiring spree in June. Instead, nonfarm payrolls rose only 18,000, the weakest reading since September, the Labour Department said on Friday, well below economists' expectations for a 90,000 rise. Many economists had raised their forecasts on Thursday after a stronger-than-expected reading on US private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.
"It's a terrible number, there is no good news you can glean from it," said David Semmens, an economist at Standard Chartered in New York. "It shows the labour market is still lagging improvements in the overall economy." Copper has taken some comfort this week from the perception that China's third rate hike this year would probably be the last in a series aimed at reining in inflationary pressures.
"Weaker Chinese manufacturing data helped, it gave the market some confidence that China wouldn't continue tightening over the rest of the year because we have now seen an impact on activity," said Gayle Berry, analyst at Barclays Capital. China accounts for nearly 40 percent of global copper consumption estimated at about 21 million tonnes this year. Factory activity in China also grew at its slowest pace in 28 months in June, data last week showed.
"Supply side disruptions are also helping copper ... The copper supply side is looking very weak this year and is vulnerable to these types of disruptions," Berry said. In a move that will keep production shut at one of the world's top copper and gold mines, workers at Freeport Indonesia plan to extend a strike by another week to July 18.
In Chile, the world's top copper mine, Escondida, halted extraction operations for a second day due to heavy rains on Friday, while workers at Codelco's top two operations, Chuquicamata and El Teniente, ratified plans to strike for 24 hours next Monday. "This poses an upside price risk for copper," Credit Suisse Private Banking said in a note. "LME inventory dynamics continue to point to strengthening end use demand, which bodes well for metals prices."
Stocks of copper in LME-registered warehouses at 461,850 tonnes are the lowest since April 21 and down more than 3 percent since a year high of 477,925 tonnes on June 9. Lead inventories at 308,300 tonnes, the lowest since late April, are also in the spotlight and helping to support prices of the battery metal. Three-month lead closed at $2,719 a tonne, from $2,720 a tonne at the close on Thursday when it hit $2,730 a tonne, the highest since April 13.
"The world's largest lead-only mine, Magellan isn't going to be operating this year at all, that is clearly price supportive," Berry said. Canadian miner Ivernia Inc said in April it was placing its flagship Magellan lead mine in Australia under full care and maintenance for an indefinite period. "The concerns about the impact of the closures of the battery plants in China have started to ease, we are seeing battery manufacturing plants restart," Berry said.
Aluminium, untraded at the close, was last bid at $2,535 a tonne from Thursday's last bid at $2,590. Zinc ended at $2,356 a tonne from $2,412 on Thursday. Traders said momentum buying pushed tin up to $27,650 a tonne, its highest since June 1, and nickel to $24,299, the highest since May 19. Tin closed at $26,800 a tonne from $27,540 at the close on Thursday and nickel was $23,890 from $23,900.