METALS-Copper ends up, off 4-mth peak, ahead of US job data

Trade the News

Thursday September 02, 2010 08:12:21 PM GMT

* Prices hit peak since April 27 before settling off highs

* Markets up on US macroeconomic data ahead of job data

(Updates with US prices and market activity, adds NEW YORK to dateline)

By Barani Krishnan and Humeyra Pamuk

NEW YORK/LONDON, Sept 2 (Reuters) - Copper hit four-month highs on both sides of the Atlantic for a second straight session on Thursday, but prices settled off their peaks as investors' attention centered on pending U.S. jobs data.

Investors had been encouraged lately by U.S. manufacturing and other macroeconomic data suggesting the country may not be headed for a douple-dip recession.

Focus is now on August jobs numbers, due on Friday, for further proof of this.

"What we see in the home sales data and factory orders is all evidence that we are not going to implode and won't go into a double dip, for now," said Howard Simons, strategist at Bianco Research in Chicago.

"We know we are weak and we are not coming out of this in a 'V' shaped recovery. At best we will have an 'L'."

Tom Kendall, analyst for Credit Suisse in Europe, agreed. "Markets have become far too pessimistic about the possibility for double-dip and the like. We'll see increasingly better data through to the back end of this year," Kendall said.

"Copper has some good underlying fundamentals. Consumer demand remains strong especially in Asia, so it's not just a fund move."

Copper for December delivery finished up 1.80 cents, or 0.5 percent, at $3.4955 per lb on the COMEX metals division of the New York Mercantile Exchange.

December copper soared during the session to a high dating back to April 27 at $3.5435, up from a low at $3.4620 a lb.

Pending sales of previously owned U.S. homes rose unexpectedly in July, an industry group said on Thursday, suggesting a tax credit-related housing market decline was close to bottoming.

New orders received by U.S. factories edged up in July after two straight months of decline on robust demand for new transportation equipment, data from the Commerce Department showed.

Benchmark copper for three-months delivery on the London Metal Exchange ended at $7,653 a tonne compared with a close of $7,606 a tonne on Wednesday. It touched $7,689 earlier, its highest since April 27.

In other metals, LME nickel gained 3 percent to end up at $21,650 a tonne, having hit $21,772 earlier, its highest since August 20, while lead ended at $2,155 a tonne versus Wednesday's $2,115 a tonne, having hit $2,180 earlier, its highest since Aug 10.

Zinc ended at $2,174 a tonne from $2,133, having hit a four month high of $2,194 earlier..

"The Chinese prefer to arb zinc rather than copper. The volumes some days are very strong," a Sydney trader said.

The differential between LME zinc and the Shanghai benchmark was open a fraction at around 100 yuan ($14.68) per tonne in favour of importing zinc, accounting for import duties and VAT.

Graphic;http://link.reuters.com/muz98n

Tin ended at $21,425 from $21,450, and aluminium ended at $2,145 from $2,108, having hit $2,147 earlier, it's highest since Aug 18.

Metal prices at 2020 GMT: Metal Last Change Pct Move End 2009 Ytd Pct move COMEX Cu 337.85 6.70 +2.02 334.65 0.96 LME Alum 2230.00 60.00 +2.76 2230.00 0.00 LME Cu 7480.00 182.00 +2.49 7375.00 1.42 LME Lead 2215.00 165.00 +8.05 2432.00 -8.92 LME Nickel 21775.00 625.00 +2.96 18525.00 17.54 LME Tin 19725.00 225.00 +1.15 16950.00 16.37 LME Zinc 2095.00 70.00 +3.46 2560.00 -18.16 SHFE Alu 15610.00 265.00 +1.73 17160.00 -9.03 SHFE Cu* 57690.00 1420.00 +2.52 59900.00 -3.69 SHFE Zin 16630.00 465.00 +2.88 21195.00 -21.54 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Barani Krishnan;editing by Sofina Mirza-Reid)

(c) Copyright Thomson Reuters 2010. Click For Restrictions. http://about.reuters.com/fulllegal.asp