Copper futures fell for the second straight session on concern that demand will ebb after economic growth slowed for the ninth time in 10 quarters in China, the world’s biggest user of industrial metals.
Gross domestic product expanded 7.5 percent in the second quarter from a year earlier, down from 7.7 percent in the prior three months, the government said today. That matched the median estimate in a Bloomberg survey of analysts. Industrial production slowed in June for the third time in four months.
“The base metals have started the week with a softer tone, coming under pressure after a choppy start on the back of weakening Chinese economic data and a stronger dollar,” Leon Westgate, a London-based analyst at Standard Bank Plc, said in a report today. “Concerns over the trajectory of China’s economy continue to mount.”
Copper futures for September delivery declined 0.3 percent to $3.1445 a pound at 1:15 p.m. on the Comex in New York. On July 12, the price fell 0.7 percent.
Hedge funds and large speculations cut wagers on falling copper prices by 2.5 percent to 26,284 Comex futures and options contracts in the week ended July 9 from a week earlier, U.S. figures showed on July 12. On April 2, the net-short position of 38,951 contracts was the most in data compiled by Bloomberg since June 2006.
“The complex appears schizophrenic in that speculative short positions have surpassed their levels during the great recession in 2008-09,” Xiao Fu, an analyst at Deutsche Bank AG in London, said in a report. “However, this contrasts to the tightness in the physical market, as indicated by elevated premiums. We expect the ensuing tussle between the two factors is likely to keep copper prices range-bound, but vulnerable to short-covering rallies.”
On the London Metal Exchange, copper for delivery in three months slid 0.5 percent to $6,917 a metric ton ($3.14 a pound). Through July 12, the price fell 12 percent this year.
Aluminum, nickel, lead, zinc and tin also dropped in London.