Commodities slumped, led by copper, oil and wheat, on speculation slowing manufacturing will curb demand for raw materials. The Standard & Poor’s GSCI index of 24 commodities fell as much as 0.8 percent as every component except natural gas declined. Copper retreated 1.6 percent and West Texas Intermediate oil slipped 0.5 percent. The GSCI slumped below its 200-day moving average, signaling further declines. Oil in New York is down 23 percent from this year’s high of $114.83 a barrel on May 2 and copper has dropped 10 percent from a record in February. The U.S. Institute for Supply Management’s manufacturing index probably dropped below 50 last month, signaling contraction for the first time in two years, according to the median estimate of 80 economists surveyed by Bloomberg. “The economic outlook is still shaky, particularly in the U.S., and that’s been driving the industrial metals and the energy sector lower,” said Michael Banks, a London-based analyst at Hermes Commodities, which manages $1.9 billion of assets. “It’s something we see continuing for the next one to three months.” In August, the GSCI index dropped 1.7 percent, the third decline in four months. A worsening global-growth outlook reduced investor demand for raw materials as alternative assets. Bonds beat stocks and commodities last month after Standard & Poor’s decision to strip the U.S. government of its AAA credit rating roiled global markets. Purchasing Index The GSCI was down 0.8 percent at 669.65 at 11:31 a.m. in London. The 200-day moving average is 670.58. The U.S. purchasing managers report is due at 3 p.m. in London. A reading of 48.5 is the median in the Bloomberg survey. In China, the world’s biggest buyer of industrial metals, a purchasing managers index showed the weakest export orders reading since March 2009. “Signs of weakening export data will imply weak demand,” said Christin Tuxen, a commodity analyst at Danske Bank A/S in Copenhagen. Oil fell 0.5 percent to $88.40 a barrel on the New York Mercantile Exchange. Crude fell in New York and London in August as the fall of Libyan leader Muammar Qaddafi’s regime sparked speculation that exports from the North African nation will be restored after a six-month suspension. Copper dropped 1.6 percent to $9,128.25 a metric ton. Wheat fell 1.2 percent to $7.8225 a bushel in Chicago. Gasoline, sugar and cocoa also declined. To contact the reporters on this story: Ying Diao in London at dying6@bloomberg.net; Maria Kolesnikova in London at mkolesnikova@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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