Copper Swings as Investors Weigh U.S. Demand Against China Debt

  • Futures gain as much as 1.1% after U.S. new-home data
  • Concerns raised about China’s debt amid slowing growth

Copper futures swung between gains and losses as investors weighed improving U.S. construction against concern about mounting debt amid slowing growth in China, the world’s biggest user.

New-home construction rose in April, keeping U.S. housing on a stable path as the world’s biggest economy tries to move past disappointing first-quarter growth. Building wiring and plumbing have been the top two U.S. copper markets in recent years in new homes, according to Copper Development Association. BlackRock Inc.’s Laurence D. Fink, who oversees the world’s biggest money manager, said that “we all have to be worried” about China’s debt even as he remains bullish on the economy in the long run.

“This is a hard market to get a grip on or take a position on,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “We did have some nice numbers here in the U.S., but the most important factor is the supply and demand equation which is still leaning a little bit questionable, particularly in China.”

Copper futures for July delivery settled unchanged at $2.089 a pound at 1:16 p.m. on the Comex in New York, after climbing as much as 1.1 percent.

Aluminum dropped on the London Metal Exchange after also gaining as much as 1.1 percent following a meeting at which Chinese President Xi Jinping urged local authorities to push ahead with plans to cut capacity in basic industries.

Xi called for “unswerving efforts” to advance supply-side reforms at a meeting of a senior policy-making committee, according to state-owned news agency Xinhua. The reforms seek to cut capacity and shut unprofitable plants in industries such as steel.

In other metals:

  • Copper for delivery in three months climbed 0.3 percent to $4,657 a metric ton ($2.11 a pound) on the LME.
  • Nickel, zinc and tin also gained in London, while lead dropped.
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