BLBG: Copper, Aluminum Slump, Crude Oil Set for Worst Week Since July
By Glenys Sim and Ben Sharples
May 7 (Bloomberg) -- Copper fell, heading for its worst week in more than three months, and aluminum declined to the lowest level since February on concern Europe’s debt crisis may slow the global economic recovery. Crude oil was set for its biggest weekly drop since July.
Copper for three-month delivery lost 1.8 percent to $6,825 a metric ton at 12:53 p.m. Singapore time and aluminum fell 1.6 percent to $2,070 a ton. Oil slumped 10.2 percent this week and is poised for its largest decline since the period ended July 10. Nickel plunged the most this week since the collapse of Lehman Brothers Holdings Inc. Gold traded near a five-month high.
Commodities tumbled as plunging stock markets increased concern that demand for raw materials may decline. U.S. stocks slumped the most in a year yesterday as waves of computerized trading exacerbated a selloff triggered by sovereign debt risk, sparking a slide in Asian shares today. The euro dropped the most since the collapse of credit markets in 2008.
“The market is clearly not happy with the current situation in Greece and fear of contagion to additional European countries such as Spain and Portugal is being taken very seriously,” said Mike Sander, an investment adviser at Sander Capital Advisors in Seattle.
The Reuters/Jefferies CRB Index of 19 commodities declined 1.9 percent yesterday to 262.76, the lowest level since Feb. 8. The Dow Jones Industrial Average had its biggest intraday loss yesterday since the market crash of 1987.
Copper, Aluminum
Copper for three-month delivery declined as much as 2.7 percent to $6,760 a metric ton on the London Metal Exchange today. Prices dropped 8.1 percent this week, the most since the week ended Jan. 29. Aluminum declined as much as 2.3 percent to $2,054 a ton, the lowest price since Feb. 15.
“We’ve seen a lot of panic this week as markets continue to be concerned about what’s happening in Europe,” Yingxi Yu, an analyst at Barclays Capital, said from Singapore. “Market sentiment is very nervous across all financial markets and the problems in Europe are not likely to go away.”
Crude for June delivery advanced as much as 64 cents, or 0.8 percent, to $77.75 a barrel, after dropping as low as $76.68 on the New York Mercantile Exchange, and traded at $77.44 a barrel at 12:58 p.m. in Singapore. Yesterday, the contract fell $2.86, or 3.6 percent, to $77.11. U.S. crude stockpiles rose 13 times in 14 weeks, a Energy Department report said on May 5.
Gold, Nickel
A 110 billion-euro ($140 billion) aid package to avoid a default by Greece has failed to prevent bond yields from rising, driving up borrowing costs for Spain and Portugal.
Gold fell for the first time in three days after the advance to a five-month peak prompted investors to sell. Bullion for immediate delivery declined 0.8 percent to $1,199.25 an ounce at 1 p.m. in Singapore after touching $1,210.70 yesterday, the highest price since Dec. 4.
Nickel headed for its worst week since the collapse of Lehman in 2008. The metal plunged 18.6 percent this week, the most since the five days ending Oct. 10, 2008. Nickel fell 3 percent to $21,400 a ton today. Rubber tumbled to the lowest price in more than four months, erasing this year’s gains.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net
