Copper registers fifth weekly drop

Job report hammers red metal prices

Copper prices dropped substantially on Friday, 02 October, 2009 at Comex and LME. Prices fell following the weak job report which dampened overall economic growth sentiments.

At USA, copper futures for December delivery ended down by 5.55 cents (2%) to 2.6815 a pound. Copper dropped 2.2% for the week. It was the fifth straight weekly drop for copper. Copper ended September, 2009, higher by 0.4%.

On the London Metal Exchange, copper for delivery in three months ended lower by $90 (1.5%) at $5,895 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

After September, it was the ninth straight monthly gain for copper. On a year to date basis, prices are higher by 85%.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

The Labor Department reported on Friday that 263,000 payroll jobs were lost in September and the unemployment rate rose to a 26-year high of 9.8%. Market expected a decline of 167,000 jobs. September was the 21st consecutive month of job losses. Since the recession began in December 2007, 7.2 million jobs have been lost and the unemployment rate has doubled.

In the currency market on Friday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.5%. The dollar lost almost all its strength against the euro.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.

Among other metals traded in the LME on Friday, lead fell 4.1% to $2,100 a ton and zinc shed 2% to end at $1,874 a ton. Nickel shed 0.3% to end at $17,375. Aluminium fell 1.4% to $1,833 a ton.