Copper Swings Between Gains and Drops on Prospects for Surplus

Copper swung between gains and declines in London as investors weighed signs of recovering economies against prospects for supply to swamp demand.

A euro-area manufacturing index released yesterday gained more than economists forecast and a similar measure for China, the world’s biggest copper consumer, published Sept. 1 reached a 16-month high. Copper production will exceed usage by 408,000 metric tons next year, the most since 2001, the average of 15 analysts’ estimates compiled by Bloomberg showed.

“The Chinese figures have been improving,” Richard Fu, director for Asia commodity trading at Newedge Group SA in London, said by e-mail. “Supply is catching up.”

Copper for delivery in three months slipped 0.1 percent to $7,229 a ton by 9:40 a.m. on the London Metal Exchange after gaining as much as 0.6 percent and retreating as much as 0.3 percent. Copper for delivery in December rose 1.8 percent to $3.2925 a pound on the Comex in New York, where floor trading was shut yesterday for the Labor Day holiday.

The Institute for Supply Management’s U.S. factory index fell to 54 in August, economists said before the gauge is published today. The nation is the second-largest copper user. Figures due Sept. 6 will show employers in the U.S. hired more workers last month than in July, according to estimates.

“The market is consolidating higher while waiting for U.S. nonfarm payrolls,” Fu said. While metals reacted to Chinese and U.S. figures, Europe is “stabilizing as well,” he said.

Copper stockpiles monitored by the LME increased 2.2 percent, the most since June 21, to 602,850 tons, daily exchange figures showed. Orders to remove the metal from warehouses dropped 0.2 percent to 283,600 tons.

Lead, nickel, zinc and aluminum fell in London. Tin rose.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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