BLBG:Copper Drops on Concern Demand Will Fade Amid Global Slowdown
Copper fell in New York as weaker- than-estimated new lending in China, the world’s biggest consumer of the metal, fueled concern demand will weaken as global economies slow.
Bank extended 623.2 billion yuan ($99.5 billion) of local- currency loans last month, the People’s Bank of China said on its website today, below the median estimate in a Bloomberg survey of analysts. The International Monetary Fund this week reduced its estimates for Chinese growth in 2012 and 2013 and also cut projections for worldwide expansion.
“The tone across markets seems to have taken a turn for the worse,” William Adams, an analyst at BaseMetals.com in London, said in a report today. “The IMF’s downward revisions to the outlooks for this year and next seem to have been the catalyst for that.”
Copper for December delivery slid 0.8 percent to $3.721 a pound by 7:05 a.m. on the Comex in New York. The contract is down 1.5 percent for the week after rising the most since January last month. Copper for delivery in three months fell 1 percent to $8,161 a metric ton on the London Metal Exchange.
“The risk is that prices move lower as economic activity does not pick up as strongly or quickly as the rally is now pricing in,” Andrew Shaw, head of base-metals and bulks research at Credit Suisse Group AG, wrote in a report today.
Copper production will exceed demand by 293,000 tons next year, against a 102,000-ton shortage this year, Credit Suisse estimates. Fourteen analysts surveyed by Bloomberg said they expect the metal to drop next week and seven were bullish, with a further 10 neutral.
Copper stockpiles monitored by the LME, down 42 percent this year, fell 1.7 percent to 215,900 tons, the lowest level since Sept. 19, daily exchange figures showed. Orders to draw the metal from warehouses declined 0.8 percent to 50,025 tons.
Aluminum for three-month delivery on the LME headed for the largest weekly retreat in almost 11 months, sliding 0.7 percent to $2,001 a ton. The lightweight metal has tumbled 5.2 percent this week after China’s slowing economy prompted Alcoa Inc. (AA), the largest U.S. producer, to cut its demand forecast.
Zinc, nickel, lead and tin fell in London.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
