Copper fell in New York for a third day this week on concern Greece’s debt crisis may slow economic growth, curbing demand for industrial metals. European Union officials failed to reach agreement on a new bailout for Greece to prevent the first euro-area default, sparking a global rout in equities and sending the euro lower against the dollar. Copper also slid as shares in China, the biggest user of the metal, reached the lowest level since September on concern credit-tightening steps may be extended. “It is now clear that the trend is downward for the economies and for the base metals as a result,” economist Dennis Gartman said today in his daily Gartman Letter. “We need to sell base metals.” Copper for September delivery dropped 4.6 cents, or 1.1 percent, to $4.093 a pound by 8:04 a.m. on the Comex in New York. Copper for three-month delivery declined 1.6 percent to $9,011 a metric ton on the London Metal Exchange. Greek Prime Minister George Papandreou will reshuffle his Cabinet and seek a confidence vote today, battling to control a shrinking majority and push through austerity measures demanded by international lenders. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, climbed as much as 0.4 percent after yesterday closing with the biggest gain since August. A stronger dollar saps demand for commodities as an alternative investment and makes metals priced in the currency more expensive in terms of other monies. Shares Decline The MSCI World (MXWO) Index of equities dropped as much as 1.2 percent today after yesterday sliding as much as 2.2 percent. The Shanghai Composite Index closed 1.5 percent lower. Futures indicated that U.S. benchmarks will retreat when trading begins in New York. China’s central bank announced a 0.5 percentage-point boost in the reserve requirement ratio for lenders on June 14, adding to its 11 increases since early 2010. The bank also raised interest rates four times in that span to cool inflation, which climbed to 5.5 percent in May, the fastest pace in almost three years. Still, Chinese industrial output gained 13.3 percent from a year earlier in May, statistics showed June 14, little changed from April’s 13.4 percent increase. “Fundamentals are still quite good and are still improving, given the latest production figures from China,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “We would expect that base-metals prices would have come under much more pressure from the dollar, and this has not happened.” Lead, aluminum, zinc, nickel and tin dropped in London. 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

Source