BLBG: Copper Declines in London on Concern About Recession in U.S.
Copper fell for the first time in six days in London on concern the recession in the U.S. may be worse than expected, weighing on demand for industrial metals.
The Federal Reserve projected a deeper recession in the world’s largest economy and second-biggest copper consumer. Former Fed Chairman Alan Greenspan signaled the financial crisis has yet to end.
“All markets are down,” Mark Heyhoe, an analyst at Hanson Westhouse Ltd. in London, said by telephone. “Demand for base metals, which are used in infrastructure and industrial production, won’t recover as strongly, so the optimism we had earlier in the year with China buying for its stockpiles has faded.”
Copper for three-month delivery fell $164, or 3.5 percent, to $4,476 a metric ton by 9:58 a.m. on the London Metal Exchange. Yesterday the metal reached an intraday high of $4,680, the highest since May 12. Copper for July delivery slid 3.1 percent to $2.0420 a pound on the New York Mercantile Exchange’s Comex division.
Metals prices dropped as equities retreated, pulling the MSCI World Index of shares lower after three days of gains.
Only China uses more copper then the U.S., and demand from the Asian nation has helped to send the metal 47 percent higher on the LME this year. Copper has advanced 1 percent in London in May after four straight months of gains.
Lower Inventories
In Japan, the fourth-largest copper consumer, shipments of wire and cable made from the metal dropped 26.3 percent in April from a year earlier, according to the Japanese Electric Wire and Cable Makers’ Association.
Stockpiles of copper in LME-monitored warehouses fell for an 11th day, sliding 1.6 percent to 336,075 tons. Still, metal booked for delivery makes up 15 percent of total inventories, down from 21 percent at the start of this month.
Global copper output lagged behind demand in February, the first deficit in eight months, as China’s use gained, the International Copper Study Group said yesterday. Demand outpaced February production by 35,000 metric tons, it said.
Among other LME metals for three-month delivery, aluminum fell 1.3 percent to $1,474 a ton. LME-monitored inventories of the lightweight metal rose 0.8 percent today to a record 4.18 million tons.
Lead fell 2.5 percent to $1,426.25 a ton, while zinc dropped 3.5 percent to $1,465 a ton. Nickel shed 2.8 percent to $12,320 a ton, and tin lost 1.5 percent to $13,500 a ton.
