SFG: Copper in New York Drops for First Day in Five on U.S. Economy
May 30 (Bloomberg) -- Copper in New York fell for the first time in five days before reports this week that may show the economy is slowing in the U.S., the world's second-largest consumer of the metal after China.
July delivery copper dropped as much as 1.2 percent to $4.135 a pound on the Comex in New York and was down 0.7 percent at $4.1585 at 8:30 a.m. local time in electronic trading. The London Metal Exchange and U.S. markets are closed today for holidays, and today's trades will be counted in tomorrow's pricing.
"Global economic data haven't been very supportive of higher prices," Huang Zhulin, an analyst at Goldstate Futures Co., said from Shanghai. "The rally last week was driven by expectations that demand will continue to pick up in China."
U.S. payrolls are expected to rise by 185,000 workers in May, following a 244,000 increase in April, according to the median forecast in a Bloomberg News survey before Labor Department figures to be released on June 3. Another report may show factory orders grew at the slowest pace in seven months.
Consumer spending in the U.S. rose 0.4 percent last month as food and fuel prices increased, the Commerce Department said May 27. The gain compared with a 0.5 percent median estimate from economists surveyed by Bloomberg News.
Copper also declined as the dollar rose for the first time in three days against the euro on concern European governments will struggle to resolve the sovereign-debt crisis. Greek Prime Minister George Papandreou said he'll press ahead with new austerity measures even as he failed to win backing from opposition parties.
Weekly Gain
Copper in London gained for a second week last week, adding 1.4 percent, on signs of stronger demand in China. Copper premiums reached a seven-month high and stockpiles tracked by the exchange slid to a 21-month low last week. The metal is still 1.3 percent lower this month, set for a third monthly drop, on concern that global growth is slowing.
"Chinese physical demand is definitely improving, judging from the decline in exchange inventories and the increase in premiums," said Huang. "However, we remain cautious as the risk of a global economic slowdown still exists."
Global demand for refined copper may grow 8.4 percent from 2010 to 2012 compared with growth of 16.4 percent from 2005 to 2010, Mark Loveitt, secretary-general of the International Wrought Copper Council, said at a May 29 conference in Shanghai.
Demand from China's power industry may grow 5 percent this year, while building and construction industry demand may expand 7 percent and consumption by the transportation industry may grow 8 percent to 10 percent, Loveitt said.
