Copper Rises on ECB Rate Cut, Drop in U.S. Jobless ClaimsJoe Richter and Agnieszka Troszkiewicz
Copper prices rebounded in London after the European Central Bank cut borrowing costs to bolster the economy, while U.S. filings for unemployment benefits fell to a five-year low.
The ECB reduced its benchmark interest rate to 0.5 percent from 0.75 percent. Applications for unemployment-insurance payments slid 18,000 to 324,000 in the week ended April 27, the fewest since January 2008, U.S. figures showed today. Yesterday, copper tumbled the most in a year on concern that demand will ebb in China, the world’s biggest user of industrial metals.
“Any time you see a rate cut, it means easier money, and that benefits commodities,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “We’ve seen some better data out of the U.S., and improvement in employment would help stabilize the market until we see improvement in China.”
Copper for delivery in three months climbed 0.8 percent to settle at $6,848 a metric ton ($3.11 a pound) at 5:52 p.m. on the London Metal Exchange. Yesterday, the price dropped 3.7 percent, the most since April 10, 2012.
Lead slumped into a bear market today, while aluminum, nickel, tin and zinc also fell in London on concern that slowing economic growth will curb demand for metals.
Yesterday, nickel and tin joined copper in a bear market, dropping at least 20 percent from recent highs.
In New York, copper futures for July delivery gained 0.8 percent to $3.1045 a pound today on the Comex. The metal has dropped 15 percent this year.
The Standard & Poor’s GSCI Spot Index of 24 raw materials headed for the biggest gain in a week, led by energy.