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Zinc .7820 slips, NY Copper 2.8849 Pressured By Soft Chinese, US Data

Jul 01, 2010 (Dow Jones Commodities News via Comtex) -- By Allen Sykora

Of DOW JONES NEWSWIRES

Copper futures weakened Thursday on continuing worries about the economy after a weak manufacturing survey in China and a rise in U.S. initial jobless claims.

Around 9 a.m. EDT (1300 GMT), copper for September delivery was 4.65 cents, or 1.6%, lower at $2.9040 per pound on the Comex division of the New York Mercantile Exchange.

A report showing that the headline number in China's June Purchasing Managers Index fell "may be a sign that Beijing's tightening measures are gaining traction," said MF global analyst Edward Meir in New York. If so, a slowing in China's economy means potentially lower copper demand in the world's largest consuming nation for the metal.

Copper is an industrial commodity used in construction and manufacturing.

China's official Purchasing Managers Index fell to 52.1 in June from 53.9 in May. This was the second straight month in which it declined, although the 16th straight month it has been above the expansionary threshold of 50. The HSBC China manufacturing index fell for the third month in a row to 50.4 from 52.7 in May.

Worries about the global economy were reinforced when an early-morning report showed that U.S. weekly initial jobless claims rose 13,000 to 472,000, said William Adams, London-based analyst with Fastmarkets.com. The expectation had been for a 2,000 decline.

The data continued a trend of mostly softer reports in the U.S. and China this week.

"The macro side of things is acting as a drag," Adams said. "The market is adjusting to the weaker economic outlook."

Other PMIs around the globe fell as well. HSBC's Indian PMI fell to 57.3 in June from 59.0 in May. The euro-zone PMI slipped to a four-month low of 55.6 in June from 55.8 in May, while the U.K.'s June PMI fell to 57.5 from 58.0 in May.

The U.S. PMI, scheduled for release at 10 a.m. EDT (1400 GMT) by the Institute for Supply Management, also is expected to decline. The consensus forecast is for a June reading of 59, compared to 59.7 in May.

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; [e-mail]

(END) Dow Jones Newswires

07-01-10 0927ET

http://news.tradingcharts.com/futures/5/2/141866125.html