SF; Copper Drops for Third Session as Manufacturing Growth Slows
June 2 (Bloomberg) -- Copper fell to the lowest price in more than a week on concern that global growth will slow, curbing demand for metals.
Reports yesterday showed the rate of manufacturing gains slowed in China and the U.S., the world's biggest copper users. European factory-output growth slowed more than previously estimated last month, figures showed yesterday. Copper prices in New York dropped 7.4 percent in May, the most since January.
"China is cooling from very strong levels, the European recovery threatens to stall, and the U.S. is leveling out," said David Thurtell, an analyst at Citigroup Inc. in London.
Copper futures for July delivery dropped 4.65 cents, or 1.5 percent, to $3.0165 a pound at 11:52 a.m. on the Comex in New York, after touching $2.9705, the lowest level for a most-active contract since May 21.
Copper has fallen this year on concern that Greece's fiscal crisis will spread to other euro-zone economies and derail global growth. Before today, the metal was down 8.5 percent this year.
"People are still scared to death of what's going to happen in Europe," said Lannie Cohen, the president of Capitol Commodity Services in Indianapolis. "Until we get those worries out of the way, copper is going to struggle."
Europe consumes 20 percent of global copper output and 15 percent to 25 percent of aluminum, zinc, nickel and lead production, according to Barclays Capital.
Building Outlook
Traders shrugged off a report today that the number of contracts to buy previously-owned U.S. homes climbed in April. Builders are the biggest users of copper for wiring and plumbing.
"We've seen some better data in the U.S., but that's not what people are focused on," Cohen said. "There's still the bigger worry that the problems in Europe will start to spill over. We're in a pickle."
Copper for delivery in three months lost $85, or 1.3 percent, to $6,665 a metric ton ($3.02 a pound) on the London Metal Exchange.
Aluminum, lead, tin, zinc and nickel prices also fell.
--With assistance by Courtney Schlisserman in Washington and Simone Meier in Zurich. Editors: Steve Stroth, Patrick McKiernan.
