Copper may rise in London on speculation that a report today will show higher unemployment in the U.S., threatening the country’s economic rebound and weighing on the dollar. The jobless rate climbed to 9.7 percent in September, said economists surveyed by Bloomberg. The U.S. Dollar Index, a six- currency gauge of the greenback’s strength, headed for a fourth weekly drop. A slumping dollar makes metals priced in the currency cheaper in terms of other monies. “I think we will finish higher again, unless the dollar picks up after the non-farm payrolls number,” said Alex Heath, head of industrial-metals trading at Royal Bank of Canada Europe Ltd. in London. “But the expectations are not promising, and if anything, I feel the dollar could weaken.” Copper for delivery in three months added $13, or 0.2 percent, to $8,113 a metric ton at 10:35 a.m. on the London Metal Exchange. The contract is up 0.2 percent this week. December-delivery copper gained 0.3 percent to $3.6895 a pound on the Comex in New York. The U.S. employment report is due at 1:30 p.m. London time. Payrolls excluding government agencies rose by 75,000, while a drop in public staffing as the decennial census wound down caused total hiring to decline for a fourth straight month, it may also show. Fed Speculation The dollar index dropped as much as 0.2 percent before rebounding and has declined 0.8 percent this week. The gauge retreated this week amid speculation that Federal Reserve policy makers may unveil more steps intended to spur growth at their next meeting on Nov. 2-3. Exports from Germany, the world’s third-biggest copper user, declined for a second month in August as a stronger euro and slowing global growth curbed demand. Sales abroad slipped 0.4 percent from July, the Federal Statistics Office said. “Global economic growth is slowing, albeit to levels that remain consistent with robust real demand for industrial metals through 2011,” said Michael Jansen, an analyst at JPMorgan Securities Ltd. in London. Copper is “on track to finish 2011 above $9,000, courtesy of another significant drawdown in inventory that brings with it a requirement to lift prices to ration demand,” he said. $8,713 a Ton? The metal will average $7,294 a ton this year, up 5.5 percent from a prior forecast, Jansen said in a report. He predicted a 2011 average of $8,713, 25 percent higher than the previous estimate. Open interest in copper, or the number of futures outstanding, rose to the highest level since March 2009, LME data showed. Open interest gained 1.6 percent to 361,360 contracts as of Oct. 5. Aluminum open interest reached the highest level since August. LME copper stockpiles fell 0.4 percent to 372,000 tons, the lowest level since Oct. 29, exchange figures showed. Inventories monitored by the Shanghai Futures Exchange gained 6,727 tons to 94,174 tons this week, the bourse said. Orders to draw copper from LME inventories, or canceled warrants, rose for a second day, gaining 16 percent to 22,725 tons. They increased 13 percent this week. Tin for three-month delivery on the LME rose 0.8 percent to $25,800 a ton. Prices reached a record $26,790 on Oct. 6. The metal is this year’s best LME performer, up 52 percent, after production disruptions in Indonesia and Democratic Republic of Congo bolstered prices. Alcoa Earnings Aluminum gained 1.2 percent to $2,353 a ton. Alcoa Inc., the largest U.S. producer, reported profit that beat analysts’ estimates and said growing Chinese demand will help boost global use by 13 percent this year. The company raised its prediction for consumption from 12 percent previously, citing higher demand also from Brazil, Russia and India. While industrial metals aside from copper probably will be in “modest surplus” next year, prices may “trade higher than we had otherwise expected,” Jansen said. “Zero interest rates, unfettered storage capacity and the penetration of financial institutions and investors into the commodity space imply that the industry will comfortably carry surplus stock.” Nickel slid 0.3 percent to $23,834 a ton, lead gained 1 percent to $2,230 a ton and zinc was little changed at $2,260 a ton. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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