BLBG: Copper Drops Most in 2 Weeks as Job Losses Signal Slower Demand
Copper futures fell the most in two weeks after a report showed U.S. companies eliminated more jobs than forecast in December, renewing concern that slower economic growth will stifle demand for metals.
An estimated 693,000 jobs were lost in December, the most since records began in 2001, ADP Employer Services said today. Economists surveyed by Bloomberg predicted a loss of 495,000, according to the median forecast. The price of copper, which moves in line with the economy, plunged 54 percent in 2008 as the U.S. slipped into a recession.
“The data that’s continuing to come out is extremely lousy,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “We’re losing more jobs. It’s not a pretty economic picture.”
Copper futures for March delivery fell 2.35 cents, or 1.5 percent, to $1.5595 a pound at 8:57 a.m. on the New York Mercantile Exchange’s Comex division. A close at that price would be the biggest one-day drop for a most-active contract since Dec. 23.
Yesterday, copper surged 8.5 percent, the biggest gain in almost a month, on speculation President-elect Barack Obama’s planned stimulus package will help to revive growth.
“We’ve been seeing a runup in optimism on Obama’s plan,” Zeman said. “It’s likely to be fairly short-lived. Until we see a turnaround in some of the economic data, copper will have a hard time making a sustainable move higher.”
On the London Metal Exchange, copper for delivery in three months climbed $40, or 1.2 percent, to $3,430 a metric ton ($1.56 a pound). The price reached a record $8,940 on July 2.
