BLBG:Copper Slides as Banks Cut Estimates for Global, Chinese Economic Growth
Copper fell the most in more than a week after Morgan Stanley and Deutsche Bank AG cut their forecasts for economic growth worldwide and in China, the biggest user of the metal.
The global economy will expand 3.9 percent this year, down from a forecast of 4.2 percent, Morgan Stanley said. Deutsche Bank reduced its China-growth outlook to 8.9 percent from 9.1 percent. More Americans than forecast filed applications for unemployment benefits last week, a government report showed today. The U.S. is the second-largest copper user.
“The markets continue to fret about global-growth prospects as the rate of deceleration is becoming broader and deeper,” Edward Meir, a senior analyst at MF Global Holdings Ltd. in Darien, Connecticut, said in a report. “We expect to see a continued sideways drift, with a downward bias in most markets over the short term.”
Copper futures for December delivery slid 6.7 cents, or 1.7 percent, to close at $3.986 a pound at 1:15 p.m. on the Comex in New York, the biggest drop for a most-active contract since Aug. 8. The price has dropped 4.6 percent this month.
Morgan Stanley also cut its estimate for China’s growth next year to 8.7 percent from 9 percent, citing the effects of weaker economies in the U.S. and Europe. Expansion in China in 2012 will be 8.3 percent, down from 8.6 percent, Deutsche Bank said, citing the “shock” of a U.S. and European Union slowdown.
“On more a medium- to longer-term outlook, it’s likely that demand for commodities is at risk, and we’d expect commodity prices to reflect that over the coming weeks,” Angus Staines, an analyst at UBS AG in London, said in a telephone interview.
The Standard & Poor’s GSCI Index of 24 raw materials fell more than 3 percent, led by energy.
On the London Metal Exchange, copper for delivery in three months dropped $195, or 2.2 percent, to $8,770 a metric ton ($3.98 a pound).
Aluminum, lead, nickel, tin and zinc also fell in London.
To contact the reporters on this story: Yi Tian in New York at ytian8@bloomberg.net; Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
