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Copper Drops to 14-Week Low on Speculation China Demand Will Ebb

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March 3 (Bloomberg) -- Copper futures fell to a 14-week low on speculation that demand will ebb in China, the world’s biggest user. Aluminum and zinc slumped in London.

A Chinese government gauge of manufacturing fell in February to 50.2, the lowest since June, data showed on March 1. Today, an index from HSBC Holdings Plc and Markit Economics dropped to a seven-month low of 48.5. Levels above 50 signal expansion. A global equity index slid as Ukraine warned that the Russian military is strengthening its presence in Crimea.

“As far as copper is concerned, you really have to pay attention to the Chinese data,” Brian Booth, a senior market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview. “You’re going to expect some volatility and extended movement in any one of the markets when you see something like what’s happening in Ukraine on the front page.”

Copper futures for May delivery fell 0.5 percent to settle at $3.172 a pound at 1:22 p.m. on the Comex in New York. Earlier, the price touched $3.1565, the lowest for a most-active contract since Nov. 21.

On the London Metal Exchange, copper for delivery in three months dropped 0.6 percent to $6,968 a metric ton ($3.16 a pound). Tin fell 2.5 percent, the most since Jan. 3, and lead declined. Nickel advanced.

Ukraine warned that Vladimir Putin’s military is strengthening its presence in Crimea amid the worst standoff between the West and Russia since the Cold War ended.

“These are very jittery markets,” Gayle Berry, an analyst at Barclays Plc in London, said in a telephone interview.

The Standard & Poor’s GSCI Spot Index of 24 raw materials climbed to the highest since September as the Ukraine tensions boosted energy and agriculture prices.

Orders to withdraw copper from warehouses monitored by the LME fell 1.8 percent to 144,025 tons, the lowest since April.

To contact the reporter on this story: Luzi Ann Javier in New York at ljavier@bloomberg.net

To contact the editor responsible for this story: Millie Munshi at mmunshi@bloomberg.net

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