BLBG:Commodities Drop, Paced by Oil and Copper, on Concern Demand May Wane
Commodities declined, led by crude oil and copper, on concerns that demand for raw materials may ease as the euro-zone debt crisis remains unresolved and the Asian Development Bank cut its growth forecast for the region.
Greek Prime Minister George Papandreou will hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy today amid increasing speculation that Greece will default. The Manila-based ADB cut its 2011 growth forecast for Asia excluding Japan to 7.5 percent from an April estimate of 7.8 percent, according to the Asian Development Outlook 2011 Update report released today.
“Sovereign-debt problems still wait for credible solutions, leaving risk appetite on shaky ground,” Stefan Graber, a commodity analyst at Credit Suisse AG in Zurich, wrote in an e-mailed report today. “For now we take a cautious stance on the cyclical metals space.”
Standard & Poor’s GSCI index tracking raw materials fell 0.7 percent to 654.17. New York-traded oil futures lost $1.04, or 1.2 percent, to $89.17 a barrel and copper slipped 1 percent to $8,680.25 a metric ton on the London Metal Exchange.
Commodities gauged by the S&P GSCI Index pared this year’s gain to 3.6 percent, weighed down by investors’ concerns about the slowing U.S. and European economies. The ADB raised the region’s inflation estimate to 5.8 percent this year, from a previous forecast of 5.3 percent. China, the top user of copper, energy and grains, raised interest rates for the third time this year in July to combat rising consumer prices.
Wen Comments
Chinese Premier Wen Jiabao today called on developed nations to cut their deficits and create jobs rather than relying on his nation to bail out the world economy.
The Paris-based International Energy Agency cut its estimate for 2012 global oil consumption by 400,000 barrels a day, and for 2011 by 200,000 a day. Worldwide demand will rise by 1.2 percent to 89.3 million barrels a day this year and by 1.6 percent to 90.7 million next year. The full resumption of Libyan exports following the ouster of Muammar Qaddafi will be “long and difficult,” it said.
Copper for delivery in three months has lost 9.6 percent this year. The contract was at a record $10,190 on Feb. 15.
‘Downward Revision’
Corn futures for December delivery fell 5 cents, or 0.7 percent, to $7.18 a bushel. Prices fell 3 percent yesterday, the most since Sept. 1.
“The downward revision of growth forecast of Asian countries raised concern that slowing economy will hurt demand,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. “Besides, debt issues in Europe remain unresolved.”
Gold for immediate delivery declined 0.2 percent to $1,830.27 an ounce after climbing 0.6 percent earlier in London.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net.
