Copper ended down for a fourth consecutive session on Friday after disappointing jobs data in the United States tempered some of the economic recovery optimism behind the metal's early-year rally to record highs.
Prices of the industrial metal pulled further away from record peaks at $9,754 per tonne in London and $4.4980 per lb in New York, falling to their lowest levels in two weeks, as investors slashed growth projections in response to the softer-than-expected jobs data.
"It shows that the US is still facing severe problems, and it will take a bit of time before it recovers to pre-crisis levels," Commerzbank analyst Daniel Briesemann said, referring to the payrolls report. London Metal Exchange (LME) benchmark copper closed down $45 at $9,425 a tonne, after sinking to a session low at $9,300, its lowest since December 24.
COMEX copper for March delivery shed 4.70 cents to end at $4.2825 per lb. The losses place the benchmark COMEX contract right at its 20-day moving average, a level seen keeping prices locked in an area of consolidation. "At the end of a volatile week, there is more of a bearish sentiment in the market," Adam Klopfenstein, senior market strategist with Lind-Waldock, said in response to the copper market's reaction to the employment report.
US non-farm payrolls increased by 103,000 in December, below economist forecasts of 175,000 new jobs, but the jobless rate fell to 9.4 percent from 9.8 percent in November, its lowest in more than 1-1/2 years. Howard Simons, strategist at Bianco Research Group in Illinois, believed the data was just "short-term noise" and saw more importance on China's outlook. "China's moves to tighten credit will have a greater effect than anything happening here," he said.
Also weighing on copper was the prospect of commodity index rebalancing, which could see large sales of copper after gains of more than 30 percent last year. The Dow Jones-UBS Commodity Index and Standard & Poor's S&P GSCI index, tracked by funds with about $160 billion in combined assets under management according to figures from Mitsubishi Corp, will rebalance to new weights January 7-13.
Stocks of copper in London Metal Exchange warehouses at 379,525 tonnes are down more than 30 percent since the middle of February. But since December 9, they have increased by more than 8 percent. Global consumption of lead is estimated at around 9 million tonnes and of copper at around 19 million tonnes. Lead closed down $7 at $2,649 a tonne. On Thursday it touched $2,712.75 a tonne, its highest since May 2008 on concern about supplies from Australia. Aluminium closed flat at $2,518 a tonne.