Copper moves up

Copper ended Friday up 2 percent, after surprisingly weak US employment data slammed the dollar and raised prospects for a sustained lower interest rate environment and another round of quantitative easing. Despite the positive finish, copper prices failed to push higher for a third straight week, ending down about 1 percent from last Friday.
Copper rose in the face of surprisingly weak US data that showed only 54,000 jobs were added in May - far less than even reduced expectations. "It doesn't matter what the reality is, it matters what the perception is, and the perception is that QE3 will at least be debated again instead of being tossed on the fire," said Dennis Gartman of The Gartman Letter.
The Fed's $600 billion bond-buying program, known as QE2, ends later this month. London Metal Exchange (LME) three-month copper shed $179, or 2 percent, to close at $9,099 a tonne. In New York, the July COMEX copper contract firmed 5.00 cents to settle at $4.1345 per lb. "It just adds to all the fears we've seen on the heels of the last few weeks of poor data out of the US, Europe and China as well," Credit Agricole analyst Robin Bhar said of the poor non-farm payrolls figure.
Purchasing managers indexes (PMI), which measure the activities of thousands of factories across the world, dropped to multi-month lows in the United States, China and Europe, reports showed this week. "It's the universality of the decline in the purchasing managers indices that is really the most telling circumstance," Gartman said.
US physical buying was also prevalent this week. Premiums for primary cathode crept higher in response to rising freight rates and tighter scrap availability. Shanghai bonded warehouse copper stocks fell by more than a quarter from April as the arbitrage between Shanghai and LME prices improved and as China's spot copper demand rose in May. Copper in warehouses monitored by the Shanghai Futures Exchange rose 4.7 percent from last week. Lead closed at $2,432 per tonne from a last bid of $2,404. Prices have been hit by pollution worries in top consumer and producer China, where the government has said it will shut down many lead-acid battery plants.