Copper fell to a two-week low in New York as investment shrank in 2012 in China, the world’s biggest metals consumer, and the World Bank lowered its forecast for global economic growth.
Foreign direct investment declined for the first full year since 2009 as economic growth slowed and manufacturers relocated to markets with cheaper labor, data from China’s Ministry of Commerce showed today. The Washington-based World Bank projected yesterday that the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012.
“China’s property prices, labor cost and environmental concerns in major cities are taking its toll on the country as a manufacturing destination,” Walter de Wet, an analyst at Standard Bank Plc, said today in a report. “With the property sector accounting for the bulk of demand for commodities such as copper, the prospects for a strong pickup in demand growth for industrial commodities remain muted.”
Copper futures for delivery in March slid 0.9 percent to $3.6065 a pound at 1:14 p.m. on the Comex in New York, after touching $3.5995, the lowest since Dec. 31. Prices fell for the third time in four sessions and are down 1.3 percent this month.
The World Bank cut its Japan forecast in half, reduced the U.S. projection by 0.5 percentage point, and predicted a second year of contraction in the euro region.
Copper also slumped on signs of ample supply. Stockpiles monitored by the London Metal Exchange rose 4.8 percent to 349,275 metric tons, the highest since Jan. 19, daily figures showed.
On the LME, copper for delivery in three months declined 0.6 percent to $7,946 a ton ($3.60 a pound).
Lead, zinc, nickel and aluminum also retreated in London, while tin was higher.