Copper hits record high

Copper rose on Friday to a record high after data showing US unemployment fell to its lowest rate since April 2009, adding to signs of improvement in the world's largest economy. Copper for three-months delivery on the London Metal Exchange closed at $10,050 a tonne, after touching a record high $10,100. It closed at $9,930 a tonne on Thursday.
-- Trade thin due to Lunar New Year holiday
Copper initially fell after data showing US nonfarm payrolls grew far less than expected in January, partly due to severe snow storms in large parts of the country. But the focus soon turned to figures showing the unemployment rate fell to its lowest level since April 2009. "Sluggish job creation figures were balanced out by a larger than expected fall in unemployment which has kept the base metals bullish momentum unchanged," said Kamil Wlazly, a metals analyst at Metal Bulletin Research. "The monthly changes and the revisions in payrolls can be quite volatile, therefore the market looked more favourably on positive unemployment data."
On Thursday, US data included better-than-expected weekly ADP jobs figures and non-farm productivity figures, as well as a rise in new orders received by factories in December. Tin also rose to a record high $31,300, led by copper. Tin for three-months delivery closed at $31,200 from a close of $30,545 a tonne on Thursday. "This buying has to be speculative buying. It is fresh fund buying," said Alex Heath of RBC Capital Markets. "Once you go through record highs you attract fresh money immediately. It is the same pattern for all metals." Trade was thin as the Lunar New Year holidays that started on Wednesday shut markets in top base metals consumer China.
Stocks of copper at LME warehouses last fell 325 tonnes to 394,150 tonnes, a small decline but a bit of respite after recent inventory rises that have dented the demand outlook. Taking some support away from prices, metal producers in the eastern Australian state of Queensland were restarting operations after Cyclone Yasi. Xstrata plans to restart its Mt Isa copper mining and smelting division a day after suspending operations as a precaution.
Australia's second-biggest nickel refinery and largest zinc mine are also set to reopen by the weekend after both were shut down ahead of Yasi. Aluminium closed at $2,541 a tonne from $2,528. Zinc closed at $2,506 a tonne from $2,472 and battery material lead finished at $2,584 a tonne from $2,554.5.
Investors kept an eye on a dominant position in LME lead, which has held 80-90 percent of stocks and cash warrants. A backwardation on lead - a premium for cash material over the three-month contract - traded at around $80 a tonne, versus $24 a tonne in late January. A high backwardation can be seen as an indication of market tightness. Stainless steel metal nickel was at $28,350 a tonne from $28,040. Nippon Steel Corp and Sumitomo Metal Industries planned to create the world's No 2 steelmaker, fanning expectations of further consolidation in the industry.