Copper futures fell the most in three weeks as signs of faltering European manufacturing and service industries fueled concern that demand for industrial metals will ebb.
Output contracted (ECPMICOU) in December for a fourth month in nations that use the euro, Markit Economics said in a report. European equities dropped from a five-month high as UniCredit SpA’s 7.5 billion-euro ($9.8 billion) share sale increased concern that banks will need to raise more capital to weather the region’s debt crisis.
“It is not easy to find positives for now,” Societe Generale SA analysts including Ahmed Behdenna in London said in a report. The euro zone is in a recession, the U.S. will reach a “cyclical peak” in the current quarter, and growth is “sub- normative” in emerging markets, they said.
Copper futures for March delivery declined 2.7 percent to close at $3.4345 a pound at 1:15 p.m. on the Comex in New York, the biggest drop for a most-active contract since Dec. 14. The metal gained 4.8 percent in the previous three sessions.
The euro touched $1.2898, approaching an 11-year low.
“Copper is down as investors reassess the major upside moves in equities and base metals yesterday,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in an e-mail. “Seeing the euro back below the critical $1.30 level leads to a ‘risk-off’ scenario.”
On the London Metal Exchange, copper for delivery in three months fell 3.2 percent to $7,540 a metric ton ($3.42 a pound).
Lead, tin, zinc, aluminum and nickel also dropped in London.
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