BLBG:Copper Reaches One-Week Low as Economies Weaken and Stocks Swell
Copper reached a one-week low in London on concern economies are weakening in the world’s biggest consumers of the metal while stockpiles are the highest since 2003, indicating ample supply.
The German economy expanded less than forecast in the first quarter, statistics showed today. Bank of America Merrill Lynch cut its estimate for growth this year in China, following JPMorgan Chase & Co. by a day. A report today will show industrial production in the U.S. shrank 0.2 percent last month, economists said. The nations are the three largest copper users.
“The poor GDP figures from Germany and France plus banks’ cut on China GDP growth lent much pressure to the metals market,” Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge Group SA in London, said by e-mail. France entered a recession last quarter, figures showed.
Copper for delivery in three months slid 1.1 percent to $7,166 a metric ton by 10:23 a.m. on the London Metal Exchange. Prices reached $7,151, the lowest since May 3. Copper for delivery in July fell 1 percent to $3.254 a pound on the Comex in New York. Aluminum retreated for a fifth session in London and tin tumbled the most in two weeks.
China’s economy will expand 7.6 percent this year, Bank of America Merrill Lynch said, less than the prior 8 percent projection. Officials have little room to rely on stimulus policies or government direct investment, Premier Li Keqiang said in a May 13 speech, according to a transcript.
Copper stockpiles tracked by the LME climbed 1.4 percent to 627,525 tons, the highest since August 2003, on deliveries in Malaysia’s Johor and New Orleans, daily figures showed. Orders to take the metal from warehouses jumped 8.9 percent to 208,550 tons on bookings in Johor.
Aluminum for delivery in three months slid 0.5 percent to $1,847 a ton on the LME. Excess output of the lightweight metal has left the industry in a “crisis,” Oleg Mukhamedshin, deputy chief executive officer at United Co. Rusal, the world’s biggest producer, said at a conference. Twenty percent of overall production is unprofitable, he said.
Tin dropped as much as 2.5 percent, the most since May 1, in London. Nickel, zinc and lead fell.
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
