- China factory gauge shows lackluster growth in biggest user
- Freeport, South32 lead declines among global mining stocks
Copper dropped and mining stocks led by Freeport-McMoRan Inc. retreated after a Chinese factory gauge contracted and the OECD warned that the global recovery is set to stall this year.
A private index Wednesday showed a 15th straight month of contraction in May for Chinese manufacturing, while the Organisation for Economic Cooperation and Development said the world economy is slipping into a self-fulfilling “low-growth trap.” Manufacturing in the 19-nation euro area barely grew last month.
“Base metals have been in broad retreat today amidst less-than-inspiring economic data from both China and the EU,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail. The factory data “seems to be consistent with lowered economic expectations from the OECD.”
Copper for delivery in three months dropped 1.2 percent to settle at $4,617 a metric ton ($2.09 a pound) at 5:50 p.m. on the London Metal Exchange. The bourse’s gauge of metals slumped last month by the most since November as a stronger dollar made commodities priced in greenbacks more expensive in other currencies.
The Bloomberg World Mining Index dropped for a third time in four days, led by a 5.1 percent decline in Phoenix-based Freeport-McMoRan, the biggest publicly traded copper producer, and a 4.5 percent drop for Perth-based South32 Ltd.
In other metals and economic news:
- Copper stockpiles in warehouses tracked by the LME rose 1.7 percent, the most since May 3, to 154,350 tons.
- Tin fell on the LME, while zinc, nickel, lead and aluminum gained.
- Steel and iron-ore producers also declined, with Cliffs Natural Resources Inc. and U.S. Steel Corp. losing more than 5 percent earlier in the session.