Copper fell the most in almost two weeks as a bigger-than-estimated slump in U.S. home sales fueled concern that the economic recovery is faltering, signaling weaker demand for metal used in electrical wires and plumbing.
Purchases of previously owned homes plunged a record 27.2 percent to a 3.83 million annual rate, figures from the National Association of Realtors showed today. The median forecast of economists surveyed by Bloomberg was 4.65 million. The U.S. is the world’s largest copper consumer after China.
“The economy is stumbling,” said Lannie Cohen, the president of Capitol Commodity Services in Indianapolis. “The copper picture is all about demand.”
Copper futures for December delivery fell 5.05 cents, or 1.5 percent, to close at $3.262 a pound at 1:15 p.m. on the Comex in New York, the biggest percentage loss for a most-active contract since Aug. 11.
A report to be released tomorrow may show that sales of new houses in the U.S. were unchanged last month. Building and construction account for almost half of U.S. copper demand, according to an estimate by Bank of America Merrill Lynch.
Copper also fell as inventories monitored by the London Metal Exchange increased for a second straight day and orders to draw metal from stockpiles dropped. The Reuters/Jefferies CRB Index of 19 raw materials declined to the lowest level since July 21, led by losses in coffee and corn.
Copper for delivery in three months fell $118, or 1.6 percent, to settle at $7,137 a metric ton ($3.24 a pound) on the LME. Aluminum, zinc, lead, tin and nickel also dropped in London.