Reuters reported that Copper is headed for its first annual drop in three years after slowing global growth sparked by the euro zone debt crisis heightened worries that demand growth for the industrial metal may falter. Prices are down 21% this year following a 30 percent increase in 2010 and a 140 percent jump in 2009 when surging demand from China's manufacturers sent copper higher. China accounts for 40% of refined copper consumption in the world. Mr Ang Kok Heng who helps manage about USD 400 million as chief investment officer at Phillip Capital Management in Kuala Lumpur said that "The fear of a U.S. recession in the middle of this year subsequently turned into fears of a euro zone slump. The euro zone trouble cannot be resolved immediately, and we can only hope it's contained next year." However, three-month copper on the London Metal Exchange snapped two days of declines and climbed 1.5% to USD 7,537 a tonne by 0711 GMT on Friday as signs of improvement in the US economy offset worries about the euro zone and encouraged investors to increase bets on riskier assets. The most-traded March copper contract on the Shanghai Futures Exchange gained 2.1 percent to CNY 55,360 (USD 8,800) a tonne. Europe's sovereign debt crisis has tempered demand for manufactured goods from China and the rest of the world, sending commodities lower this year. The 19-commodity Thomson Reuters-Jefferies CRB index has lost 8.5% this Year. China's vast factory sector shrank again in December as demand at home and abroad slackened, a purchasing managers' survey showed on Friday.

Source