Copper Drops From Seven-Week High on Signs of Slowing Economies
Copper fell from a seven-week high in London as signs economies are slowing worldwide fed concern that demand may weaken.
Euro-area services and manufacturing output contracted for a fifth month in June, an index from Markit Economics showed today. Retail sales in Europe slid from a year earlier in May, according to European Union statistics. The European Central Bank may lower its benchmark interest rate to a record 0.75 percent tomorrow, economists surveyed by Bloomberg said.
“The market has been positioned very bearishly,” Gayle Berry, an analyst at Barclays Plc in London, said by phone. “We are not seeing any significant change in the short-term picture. The market is already expecting a cut tomorrow.”
Copper for three-month delivery declined 1.3 percent to $7,714 a metric ton by 4:03 p.m. on the London Metal Exchange. Prices yesterday touched $7,823, the highest level since May 15. Copper for September delivery fell 0.9 percent to $3.507 a pound on the Comex in New York, where floor trading is closed today for the Independence Day holiday.
Price gains spurred sales of copper scrap, Herwig Schmidt, head of sales at Triland Metals Ltd. in London, said by phone.
A composite index based on a survey of euro-area purchasing managers came in at 46.4 last month, Markit said. Readings below 50 indicate contraction.
A manufacturing index for China released this week by Markit and HSBC Holdings Plc reached a seven-month low, and a similar U.S. gauge from the Institute for Supply Management showed the first contraction since 2009. The nations are the world’s two biggest consumers of copper.
Inventories of the metal monitored by the LME, down 32 percent this year, fell 0.6 percent to 253,525 tons, daily exchange figures showed.
Zinc for three-month delivery on the LME dropped 0.9 percent to $1,889.75 a ton. Orders to withdraw the metal from warehouses jumped 32 percent to 209,175 tons, the highest level since at least October 1997. The surge may stem from “warehousing-type activity,” Leon Westgate, an analyst at Standard Bank Plc in London, said in a report.
Aluminum, lead, nickel and tin fell in London.
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