Friday, October 06, 2006

Copper fell in London on speculation that a job report may indicate a slowdown in economic growth in the U.S., the world's second-largest user of the metal.

Employers probably added 120,000 workers to payrolls last month, the fewest in four months, according to the median estimate of 73 economists surveyed by Bloomberg News. Copper, used in wiring and plumbing, has dropped 3.7 percent this week as declines in oil prices spurred selling by index-linked funds that track both commodities.

``Positive market fundamentals in copper have been arrested because of concern about the U.S. economy and oil prices,'' said Alex Heath, director of base metals trading in London at RBC Capital Markets, which trades on the London Metal Exchange. ``Our overall view here is that the U.S. economy is undoubtedly slowing.''

Copper for delivery in three months on the LME fell $32, or 0.4 percent, to $7,267 a metric ton as of 9:28 a.m. local time, heading for its first weekly drop in three. The metal is down 18 percent from the record $8,800 a ton traded on May 11.

The jobs report for the U.S. Labor Department is set for release at 1:30 p.m. London time.

Six of 12 analysts, investors and traders surveyed by Bloomberg yesterday forecast copper will drop next week. Four expected a gain and two predicted little change. Next week is London Metal Exchange Week, when there tends to be ``some fairly big moves'' in metals prices, Kevin Norrish, Barclays Capital's director of commodities research in London, said yesterday.

China in the world's largest user of copper.

Most other metals on the LME also dropped. Aluminum declined $6.50, or 0.3 percent, to $2,535 a ton. Nickel slipped $100 to $28,800, zinc fell $18 to $3,422 and lead was $15 lower at $1,380. Tin rose $50 to $9,100.

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