Copper Drops, Paring First Monthly Gain in Four, on U.S. Slowdown Concern

Copper dropped, paring the first monthly gain since March, as expectations of a slowdown in U.S. economic growth weakened the outlook for metals demand.

Copper for delivery in three months declined as much as 0.7 percent to $7,182 a metric ton on the London Metal Exchange and was at $7,200 at 12:08 p.m. in Shanghai. The metal has gained about 11 percent this month as equity markets rallied and the dollar dropped amid optimism that the economic recovery remains intact.

A report today may show the U.S. economy grew at an annual rate of 2.6 percent in the second quarter, according to a Bloomberg survey of economists. That follows a 2.7 percent increase in the first quarter. Asian stocks fell for the first time in six sessions today as Japan’s unemployment rate unexpectedly rose to a seven-month high in June.

“People have become cautious ahead of the key U.S. economic data,” said Cao Yanghui, an analyst at Nanhua Futures Co. from Hangzhou, Zhejiang province. “The gains in U.S. stocks this month boosted overall market sentiment, and metals benefited from that.”

Copper for October delivery in Shanghai declined 0.4 percent to 56,020 yuan ($8,270) a ton by the 11:30 a.m. local time break. Aluminum in London dropped 0.3 percent to $2,086 a ton, nickel was little changed at $20,700 a ton, zinc fell 1.3 percent to $1,965, and tin was yet to trade.

China Nonferrous Metal Mining Group and Taiyuan Iron & Steel Group have agreed to jointly invest in a nickel mine in Myanmar, according to a statement on the website of the steelmaker. Taiyuan, the world’s biggest stainless steelmaker according to the company, needs more than 100,000 tons of nickel a year, the statement said.

--Li Xiaowei, Helen Sun. Editors: Richard Dobson, Matthew Oakley.

To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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