By Anna Stablum Sept. 3 (Bloomberg) -- Copper headed for a third weekly advance in London before U.S. payrolls data and as stockpiles dropped for a 28th week, signaling steady metals demand. Inventories tracked by the London Metal Exchange dropped 0.6 percent this week, posting the longest weekly falling streak since August 2004, according to daily data from the bourse. In Shanghai, stockpiles dropped to a one-month low. Data today is expected to show U.S. employment cooling in August, following better-than-expected U.S. pending home sales yesterday. The U.S. is copper’s second-largest user after China. “The recent run of economic figures has been much more encouraging, boosting sentiment toward copper,” said Leon Westgate, an analyst at Standard Bank Plc in London. Still, the market is “nervous ahead of the payrolls,” he said. Copper for delivery in three months rose $23, or 0.3 percent, to $7,658 a metric ton at 9:44 a.m. on the London Metal Exchange. The contract rose 2.7 percent this week. Copper for delivery in December eased 0.2 percent to $3.49 a pound on the Comex in New York. The U.S. market will be closed on Sept. 6 because of a holiday. Falling stockpiles in Shanghai and lower inventories in LME-monitored warehouses supported prices, Westgate said. “The holidays are coming to an end and the market generally seems to be waking from its summer slumber,” he said, referring to the Northern Hemisphere’s season. Inventories Fall Inventories dropped 0.5 percent today to 397,675 tons, the lowest since Nov. 11, according to the bourse. Stockpiles have fallen 21 percent this year, on course for the first annual drop since 2004. Metal booked to be withdrawn from inventories, or so-called canceled warrants, dropped for a second day, down 4.5 percent to 27,650 tons. Copper stockpiles monitored by the Shanghai Futures Exchange dropped to 105,917 tons this week, the lowest level since the week to July 30, according to exchange data. Copper reached $7,689 a ton yesterday, the highest intraday price since April 27, after pending U.S. home sales unexpectedly increased, snapping two months of declines. Construction accounts for a quarter of copper consumption, according to the Copper Development Association. Today, the Labor Department’s report is scheduled for 8:30 a.m. New York time. Private payrolls that exclude government agencies rose by 40,000 after a 71,000 July gain, and the jobless rate climbed to 9.6 percent, according to a survey by Bloomberg News. Overall payrolls fell by 105,000 last month, according to the survey median. The jobless rate in July was 9.5 percent. Weaker Pace Another report may show services expanded at a weaker pace. The Tempe, Arizona-based Institute for Supply Management’s services gauge dropped in August to a six-month low of 53.2 from 54.3 the prior month, the median estimate of economists surveyed showed. Figures greater than 50 represent expansion for the industries that cover almost 90 percent of the economy. Aluminum for three-month delivery on the LME rose 1 percent to $2,166 a ton. Inventories in LME-monitored warehouses dropped 0.1 percent to 4.4 million tons, a ninth consecutive drop. Zinc eased 0.1 percent to $2,171 a ton and tin declined 0.2 percent at $21,375 a ton. Nickel advanced 1.4 percent to $21,940 a ton and lead climbed 0.5 percent to $2,166.50 a ton. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.

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