Oct. 23 (Bloomberg) -- Copper fell to a six-week low in New York as commodities erased gains for the year on concern that government plans for economic stimulus won’t be enough to revive slowing growth worldwide.
A Bank of Spain estimate showed today that the nation’s economy contracted for a fifth quarter, and the government’s bonds have declined since European Union leaders failed at a summit last week to discuss further aid. Cuts in profit forecasts by companies including DuPont Co. and 3M Co. added to investor concerns. Copper rallied 7.5 percent last quarter on bets that stimulus from Europe to China would boost demand.
“What is at work is the systematic unwinding of the monstrous gains triggered by the central bank easing policies announced in August and September,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a note. “One can make the case that investors simply do not have the patience (or these days, the credit lines) to keep metal prices at elevated levels while waiting for central bank easing policies to work their magic.”
Copper futures for December delivery slumped 1.4 percent to settle at $3.5695 a pound at 1:22 p.m. on the Comex in New York, after touching $3.548, the lowest for a most-active contract since Sept. 7. The metal has dropped for four straight sessions, the longest losing streak since Aug. 30.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 2.1 percent to 635.1, erasing this year’s gain.
“There’s been a notable slowdown in China’s demand,” Xstrata Plc Chairman John Bond said in Beijing today. Xstrata, Zug, Switzerland-based producer of copper, zinc, coal and nickel, has reduced output, he said, without providing more details. China is the world’s biggest copper user.
Stockpiles of copper monitored by the London Metal Exchange rose for a fourth session in five, to 222,600 metric tons.
On the LME, Copper for delivery in three months retreated 1.5 percent to $7,831 a ton ($3.55 a pound).
Aluminum, zinc, lead, nickel and tin also declined in London.
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