Copper futures slumped to the lowest in almost eight months after an industry report on manufacturing signaled demand may ease in China, the world’s biggest user of industrial metals.
The Purchasing Managers’ Index was 50.9 in March, government data showed today. The median estimate of analysts in a Bloomberg News survey was 51.2. Confidence among large manufacturers in Japan improved less than economists expected.
“The Chinese data came in below expectations, and the realization may be starting to set in that demand isn’t picking up as much as people thought it would,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “The expectations for China are high, and they’re just not there. Stocks of copper are also very high.”
Copper futures for May delivery fell 0.8 percent to settle at $3.3745 a pound at 1:13 p.m. on the Comex in New York. Earlier, the metal touched $3.34, the lowest for a most-active contract since Aug. 3. The price slumped 6.9 percent in the first quarter.
Stockpiles monitored by the Shanghai Futures Exchange rose to 247,591 metric tons last week, the highest in at least 10 years. In the first quarter, inventory tracked by the London Metal Exchange surged 78 percent to 569,775 tons, the highest since October 2003.
China’s largest cities, including Beijing and Shanghai, tightened rules on home purchases to step up attempts to cool the property market.
Chile’s state-owned Codelco, the biggest copper producer, reached an agreement with workers to end a four-day strike and resume operations at its largest mine today.
The LME was closed today for a public holiday, and the Comex was shut on March 29.