Copper Drops as China Export Collapse Adds to Slowdown Signs

Copper fell in New York, narrowing a weekly gain, as a collapse in Chinese export growth added to signs of a slowing economy in the world’s biggest consumer of the metal.

Outbound shipments rose 1 percent from a year earlier in July, the customs bureau said today. Analysts surveyed by Bloomberg News forecast an 8 percent increase. Reports yesterday showed weaker-than-predicted industrial production and retail sales in the country.

“Chinese trade data points to a harder landing than originally thought, prompting a renewal of pessimistic sentiment on China, which is clearly weighing on metals,” David Wilson, an analyst at Citigroup Inc. in London, said by e-mail.

Copper for September delivery fell 1.5 percent to $3.3735 a pound by 7:44 a.m. on the Comex in New York, cutting this week’s climb to 0.2 percent. Copper for three-month delivery slid 1.3 percent to $7,440 a metric ton on the London Metal Exchange.

China’s economy is at risk of weakening for a seventh quarter. The nation’s central bank may cut lenders’ reserve requirements “soon” and another interest-rate reduction is “in the pipeline,” Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, said in a note.

Imports of copper into China rebounded in July from a 10- month low, customs figures showed. Inbound shipments of the metal and copper products were 366,548 tons.

Copper inventories tracked by the LME fell 1 percent to 241,250 tons, led by declines in the U.S., daily exchange figures showed. That capped a third weekly drop to the lowest level since June 12. Stockpiles monitored by the Shanghai Futures Exchange slid 3.7 percent to 158,052 tons this week, according to a bourse statement.

Nickel for three-month delivery on the LME fell 1.2 percent to $15,316 a ton, extending this week’s decline to 1.8 percent. Open interest, or the number of outstanding futures contracts, rose as of Aug. 8 to 183,308, the highest level since at least September 2005.

Aluminum, zinc, lead 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: John Deane at jdeane3@bloomberg.net