Copper Rebounds After U.S. Manufacturing Expands, Allaying Economy Concern

Copper prices rose for the first time in three days after a report showed that U.S. manufacturing expanded for a ninth straight month, easing concern that the global economic recovery is faltering.

The Institute for Supply Management-Chicago Inc. said today its business barometer in June stood at 59.1. Figures greater than 50 signal growth. Commodity and equity market rallied after the report. This quarter, the metal fell 17 percent, the first drop since the end of 2008.

“Copper will be incredibly volatile in the coming months,” Spencer Patton, the chief investment officer of Steel Vine Investments in Chicago, said in an e-mail. “Global growth will be self-sustaining, but slower.”

Copper futures for September delivery rose 2 cents, or 0.7 percent, to $2.9505 a pound on the Comex in New York.

Earlier, futures fell as much as 2 percent. A report today showed that U.S. private-sector employers added fewer jobs than forecast. China’s benchmark stock index fell to a 14-month low on mounting concern that the nation’s expansion is easing. China and the U.S. are the world’s top metal buyers.

In June, copper declined 5 percent. Futures are down 12 percent this year.

“Copper’s drop is indicative of a significant downshift coming in the back half of this year for industrial growth,” said James Dailey, who manages $145 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania.

The price may fall to as low as $2.30 a pound by the end of the year, Dailey said.

Copper for delivery in three months rose $21, or 0.3 percent, to $6,515 a metric ton ($2.96 a pound) on the London Metal Exchange.

Aluminum, zinc, lead and nickel also climbed on the LME. Tin dropped.

To contact the reporters on the story: Millie Munshi in New York at mmunshi@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net.