Farallon Resources Ltd. (fka FRLIF)

[the cork]

Zinc gains .6%, Copper Extends Gain in New York After U.S. Jobs Report Signals More Demand

By Anna Stablum - Sep 3, 2010 5:56 AM PT

Copper extended its weekly gains in New York and London after payrolls data in the U.S., copper’s second largest user, eased concerns about an economic slowdown.

Private payrolls that exclude government agencies climbed 67,000, after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a gain of 40,000. Overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent as more people entered the labor force.

“From a metals perspective, more employment means more consumers and more durable goods purchases,” said David Thurtell, a Citigroup Inc. analyst in London.

Copper for delivery in December rose 1.55 cent, or 0.4 percent, to $3.511 a pound at 8:37 a.m. on the Comex in New York. The U.S. market will be closed on Sept. 6 because of a holiday. The most-active contract rose 3.7 percent this week, the most since the week ended July 30. Copper for delivery in three months gained 1 percent to $7,703 a metric ton on the London Metal Exchange. The contract reached an intraday high of $7,726 after the U.S. data, the most since April 27.

Falling stockpiles in Shanghai and lower inventories in LME-monitored warehouses supported prices, said Leon Westgate, an analyst at Standard Bank Plc in London. Inventories tracked by the LME dropped 0.6 percent this week, down for 28 weeks in a row and the longest weekly decline since August 2004, according to exchange daily.

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. 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 today.

ISM Data Next

Another report at 10 a.m. 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 1.2 percent to $2,170 a ton. Zinc gained 0.6 percent to $2,188 a ton and tin advanced 0.8 percent at $21,600 a ton. Nickel advanced 1.9 percent to $22,060 a ton and lead climbed 1.5 percent to $2,187 a ton.

http://www.bloomberg.com/news/2010-09-03/copper-set-for-weekly-gain-as-stockpiles-drop-before-u-s-employment-data.html