BS: Copper Falls in London as Growth Weakens in Main Consumer China
July 15 (Bloomberg) -- Copper fell in London on concern demand may wane in China, the world’s biggest user, after economic growth weakened and industrial production rose less than estimated.
“The Chinese data shows a clear slowdown,” said Jesper Dannesboe, a strategist at Societe Generale SA in London. “But we would expect the Chinese government to prevent the slowdown” from continuing in the second half, he said.
Copper for delivery in three months declined $47, or 0.7 percent, to $6,678 a metric ton at 9:39 a.m. on the London Metal Exchange. Futures for September delivery rose 0.4 percent to $3.0215 a pound on the Comex in New York.
Inventories Contract
The Fed lowered its forecast for growth this year in the U.S. economy, the world’s biggest, to between 3 percent and 3.5 percent from the prior 3.2 percent to 3.7 percent.
Copper rebounded from a drop of as much as 1.8 percent on the LME, helped by a further slide in inventories. Stockpiles monitored by the exchange fell for a 20th day to 427,725 tons, the lowest level since Nov. 23. They are down 15 percent this year and headed for the first annual drop since 2004.
Bookings to remove metal from LME warehouses rose 11 percent, the most in a month, to 31,575 tons.
“Tighter expected balances and declining inventories will likely put upward pressure on key commodity prices and returns,” Goldman Sachs Group Inc. analysts led by London-based Jeffrey Currie said today in a report. Still, “policy risks in Europe, China and the U.S. are likely to continue to generate volatility and increase the risk of economic disappointments over the short term,” they said.
U.S. Factories
Aluminum for three-month delivery on the LME fell 0.4 percent to $2,001 a ton. Immediate-delivery metal’s discount to the three-month price, the so-called contango, narrowed to $18.25 yesterday, the lowest closing level in almost a year and down from $19.75 in the prior session.
“Financing deals are tightening up the market,” William Adams, an analyst at Basemetals.com, said during a Sucden Financial Ltd. presentation yesterday. Estimates are that about 80 percent of aluminum stockpiles in LME warehouses are tied into financing agreements, according to Sucden.
LME-monitored inventories of the lightweight metal have dropped 5.3 percent this year to 4.38 million tons. Today they gained after five declines in a row.
Lead fell 0.4 percent to $1,820 a ton and nickel dropped 0.1 percent to $19,377 a ton. Zinc slipped 0.7 percent to $1,837 a ton and tin rose 0.5 percent to $18,065 a ton.
--With assistance from Courtney Schlisserman in Washington. Editors: Dan Weeks, John Deane.
To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
