Copper declined for the first time in four days to a four-month low as concern that Greece may quit the euro region outweighed a report showing an improvement in U.S. home sales.
The three-month delivery contract fell as much as 1.9 percent to $7,594.50 a metric ton, the lowest level since Jan. 10, on the London Metal Exchange and traded at $7,595 by 5:27 p.m. Tokyo time. July-delivery metal dropped 1.7 percent to $3.427 a pound on the Comex.
Greece’s former Prime Minister Lucas Papademos said that while it is unlikely the nation will leave the euro, it’s still a risk, according to a report in the Wall Street Journal yesterday. The concern also overshadowed speculation that Europe and China will step up efforts to bolster economic growth. The National Association of Realtors said sales of existing homes increased in April for the first time in three months, adding to signs the U.S. housing market is recovering.
“Because of mounting concern over Greece, investors are increasingly reluctant to take risk for a while,” said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. “The downside would be limited as we’ve recently seen good support around $7,600.”
European Union leaders will gather in Brussels to discuss how to revive growth and grapple with a political impasse in Greece. Europe’s crisis risks spiraling and seriously damaging the world economy, the Paris-based Organization for Economic Cooperation and Development said in a report yesterday.
Inventories monitored by the London Metal Exchange dropped 0.2 percent to 223,975 tons, daily exchange figures showed yesterday. The stockpiles are down 40 percent this year. Orders to draw copper from warehouses fell 13 percent to 30,525 tons.
Investors are closely watching China’s manufacturing activity preliminary reading for May to be released tomorrow by HSBC Holdings Plc and Markit Economics, Emori said. Purchasing managers’ index rose to 49.3 in April from 48.3 the previous month. The reading still signaled a sixth straight month of contraction. China is the world’s biggest consumer of industrial metals.
The September-delivery contract on the Shanghai Futures Exchange slumped 1.5 percent to close at 55,000 yuan ($8,690) a ton.
On the LME, aluminum was down 0.6 percent at $2,017 a ton, zinc lost 1.8 percent to $1,878 a ton and lead dropped 1.7 percent to $1,931.50 a ton. Nickel fell 0.5 percent to $16,811 a ton. Tin declined 1.8 percent to $19,360 a ton.