BLBG:Copper Declines to One-Week Low as Slowing Economies May Cut Into Demand
Copper fell in London to the lowest price in more than a week on concern slowing economies may reduce demand.
Job growth in the U.S. unexpectedly stagnated in August, the weakest payrolls reading since September 2010, government figures showed Sept. 2. An index of investor confidence in the euro region declined today. The MSCI World (MXWO) Index of shares dropped as much as 1.3 percent.
“The deteriorating economic situation in the West is dominating sentiment,” William Adams, an analyst at Basemetals.com, said in a report.
Copper for three-month delivery fell $56, or 0.6 percent, to $9,020 a metric ton by 9:21 a.m. on the London Metal Exchange. Prices reached $8,990.25, the lowest level since Aug. 26. Copper for December delivery decreased 0.7 percent to $4.096 a pound on the Comex in New York.
Prices also retreated after German Chancellor Angela Merkel’s party suffered its fifth election loss this year following a campaign based on her handling of the euro-area debt crisis. Germany’s top constitutional court will rule on Sept. 7 in three cases challenging the country’s participation in a bailout of Greece and the euro-area rescue fund.
“Focus this week is likely to switch to the EU debt situation again as Germany’s government is voting on the EU bailout fund,” Adams said.
Stronger Dollar
Metals also declined as the U.S. Dollar Index headed for its longest winning streak since January, making dollar-priced commodities more expensive in terms of other monies.
Citigroup Inc. lowered its 2011 price forecast for copper by 6.2 percent to $9,099 a ton and nickel by almost 14 percent to $23,649 a ton, citing its reduced economic-growth forecasts for the U.S., the euro area and India.
Hedge-fund managers and other large speculators decreased their net-long position in Comex copper futures in the week ended Aug. 23, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 3,850 contracts, falling 35 percent from a week earlier.
Losses may be limited as Freeport-McMoRan Copper & Gold Inc. (FCX)’s Peruvian copper miners plan to hold a two-day strike over benefits starting Sept. 7.
Copper stockpiles monitored by the LME fell for the first day in three, declining 475 tons to 465,600 tons, exchange data showed today. Orders to draw metals from warehouses, known as canceled warrants, declined 150 tons to 5,175 tons.
Aluminum for three-month delivery on the LME declined 0.7 percent to $2,419.50 a ton and lead was unchanged at $2,460 a ton. Nickel decreased 0.7 percent to $21,350 a ton, tin dropped 0.8 percent to $24,050 a ton and zinc gained 0.3 percent to $2,201 a ton.
Comex floor trading is closed today for Labor Day.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
