Copper held steady on Friday but weaker US jobs data fuelled concerns about growth in the world's largest economy and persistent worries about demand in top consumer China weighed on sentiment. Benchmark copper on the London Metal Exchange closed little changed at $5,100 per tonne from $5,097 at Thursday's close. Earlier in the session it slid to $5,010 after data showed the United States created fewer jobs in September than expected.
The figures deepened concerns about global growth, following data on Thursday that showed activity in China's factory sector also shrank again last month. "The recent decline is mainly attributable to all this concern about slowing Chinese demand," Edward Meir of INTL FC Stone said. "Now, markets are coming around to the notion that the US could also be slowing down. And that's very disturbing because then you have the two biggest economies in the world both decelerating."
However, copper is expected to get some support from falling stocks and output cuts. Stocks of copper in LME-registered warehouses have fallen about 14 percent to 319,425 tonnes since late August. Analysts also expect prices to be lifted by output cuts in Chile. The country's second-largest copper mine, Collahuasi, owned by London-listed Anglo American and Glencore, said this week it planned to cut output by 30,000 tonnes.
"We're actually beginning to get a copper market that is beginning to tighten quite significantly," said David Wilson, analyst at Citi. Three-month aluminium ended down 0.5 percent at $1,558 a tonne, zinc lost 0.2 percent to $1,685 and lead fell 0.4 percent to $1,643. Zinc has been under pressure recently, as stocks in LME-approved warehouses have risen by nearly 40 percent since early August.
But analysts expect prices to strengthen, partly due to a small increase in Chinese consumption in August and the upcoming closure of the Century and Lisheen mines this year. "On a short-term basis, the stocks inflows have hurt zinc," Macquarie said in a research note this week. "However, with a major chunk of hidden stocks now visible once again, the future threat level has been diminished." Nickel was untraded at the close but was last bid down 0.5 percent at $10,025 per tonne and tin gained 0.9 percent to $15,575.
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