Copper futures may extend a drop to to the lowest in almost seven months as Cyprus prepares to vote on a bank levy amid signs that metal demand remains slack.
Cypriot lawmakers are scheduled to vote today on how to spread the burden of raising 5.8 billion euros ($7.5 billion) from bank depositors to unlock emergency loans. Yesterday, futures dropped the most in four months on Europe’s debt woes. Japan’s copper wire and cable shipments fell in February, while a measure of global inventory of the metal rose to the highest since 2003.
“The European concerns are causing buyers to step aside,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Japan shipments fell and we’re seeing higher inventories, so that’s giving pause to those expecting higher demand.”
On the Comex in New York, copper futures for delivery in May fell less than 0.1 percent to $3.427 a pound at 9:56 a.m. Earlier, the metal touched $3.4025, the lowest for a most-active contract since Aug. 21.
Copper pared losses after a government report showed new U.S. home construction rose in February and building permits climbed to the highest in almost five years. The Copper Development Association says construction generates about 40 percent of demand for the metal.
On the London Metal Exchange, copper for delivery in three months fell less than 0.1 percent to $7,574 a ton ($3.44 a pound). Earlier, the price declined as much as 0.7 percent and rose as much as 0.4 percent.
Lead, zinc, nickel, aluminum and tin gained in London.
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