SF: Copper Drops in London, Erasing Advance as Dollar Strengthens
June 4 (Bloomberg) -- Copper fell for a fifth day in London, erasing a gain as the dollar strengthened.
The U.S. Dollar Index, a six-currency gauge of the greenback's strength, rose, wiping out a drop. Copper had climbed as much as 1.5 percent before the release of a report expected to show payrolls climbed the most since 1983 in the U.S. The metal has slid 6.8 percent this week, partly on concern that China may take more steps to restrain its economy.
"Despite continuing positive economic data releases out of the U.S., the market seems to be viewing the net impact in the consuming sector as anemic without China to keep the fires burning," Alex Heath, head of industrial-metals trading at RBC Capital Markets in London, said in a report today.
Copper for delivery in three months fell $61.25, or 0.9 percent, to $6,463.75 a metric ton at 12:48 p.m. on the London Metal Exchange. The contract has dropped 12 percent this year. Futures for July delivery slid 0.9 percent to $2.92 a pound on the Comex in New York.
The dollar index advanced as much as 0.7 percent. A stronger U.S. currency makes dollar-priced metals more expensive in terms of other monies. The gauge advanced for a sixth month in a row in May as the euro, down 16 percent this year against the dollar, slumped on concern about the European crisis.
'All About the Dollar'
"The strength in the dollar might undermine some of this," Marc Elliott, an analyst at Fairfax IS in London, said today by telephone, referring to the U.S. economic figures. "It's all about the dollar."
Employers in the U.S. added 536,000 jobs in May, the fifth straight month of growth, according to the median forecast of 82 economists surveyed by Bloomberg News. The Labor Department report is due at 1:30 p.m. London time.
Figures yesterday showed that orders placed with U.S. factories rose for an eighth month. The Institute for Supply Management's index of non-manufacturing businesses, which make up almost 90 percent of the U.S. economy, held at 55.4 for a third month, the fifth month of growth. Readings above 50 signal expansion.
Inventories of copper tracked by the LME slipped for a 13th day today to 473,000 tons, the lowest level since Dec. 15. Bookings to remove metal from warehouses fell 4.7 percent to 22,175 tons. Inventories monitored by the Shanghai Futures Exchange slid 4,974 tons to 152,724 tons this week, the lowest in three months, the bourse said.
Zinc for three-month delivery on the LME fell to the lowest intraday level since July and nickel dropped to the lowest since February. Yesterday aluminum fell to the lowest price since November.
Zinc fell 2.4 percent to $1,705 a ton and nickel dropped 1.7 percent to $18,355 a ton. Aluminum slipped 0.1 percent to $1,953 a ton, lead climbed 0.3 percent to $1,650 a ton and tin dropped 2.4 percent to $17,250 a ton.
--With assistance by Edith Balazs in Budapest, Courtney Schlisserman, Shobhana Chandra and Bob Willis in Washington. Editors: Dan Weeks, Claudia Carpenter.
