Copper fell in New York, heading for the biggest weekly drop in 16 months and a bear market, on concern that slowing economies from China to the U.S. will reduce demand as stockpiles of the metal expand.
China’s economy has grown by less than 8 percent in the past four quarters, the longest streak in at least 20 years. An index of leading U.S. economic indicators unexpectedly fell, a private report showed yesterday. Copper inventories tracked by the London Metal Exchange have almost doubled in 2013.
“The increase in copper stocks gives reason to think supplies are plentiful, and China’s growth is not what people expected it to be,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview yesterday. “The market is well-supplied, and we’re going to continue to see pressure on prices.”
Copper futures for delivery in July tumbled 1.6 percent to $3.167 a pound at 12:35 p.m. on the Comex in New York, heading for a weekly drop of 5.5 percent, the biggest since Dec. 16, 2011. A close under $3.1828 would be 20 percent below the February 2012 peak, meeting the common definition of a bear market.
Production will exceed demand by 341,000 metric tons this year, more than last year’s 238,000 tons, according to Citigroup Inc. LME stockpiles have jumped 92 percent to 614,350 tons this year, exchange figures showed.
Inventories monitored by the Shanghai Futures Exchange declined to 223,663 tons this week, bourse data showed today. Bonded warehouses in the country hold 600,000 tons of copper, used in pipes and wiring, Paul Crone, chief investment officer at Citrine Capital Management LCC, said April 17.
On the LME, copper for delivery in three months slid 1.5 percent to $6,983.75 a ton ($3.17 a pound).
Aluminum, nickel and zinc also fell in London. Lead and tin gained.
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