Copper Tumbles From Record in London on Concern Chinese Demand Will Slump
Copper tumbled the most in four months in New York and fell from a record in London on concern that China’s bid to rein in inflation will cool demand for industrial metals.
China’s central bank may raise interest rates within weeks after inflation accelerated to the fastest pace in 25 months in October, according to a Bloomberg News survey. The country is the world’s largest metals consumer. Copper has gained more than fivefold since 2002 as robust growth in emerging economies boosted demand for the metal used in buildings and electric grids.
“China sent shivers through the market,” said Michael Gross, an analyst at OptionsSellers.com in Tampa, Florida. “Prices will continue to fall next week.”
Copper futures for March delivery declined 13.15 cents, or 3.3 percent, to close at $3.898 a pound at 1:20 p.m. on the Comex in New York, the biggest loss since June 29. The price fell 1.3 percent this week, the third decline in four weeks.
Copper may touch $3.85 next week and fall to as low as $3.71 in a month, Gross said.
On the London Metal Exchange, copper for delivery in three months fell $215, or 2.4 percent, to $8,615 a metric ton ($3.91 a pound). Yesterday, the price touched a record $8,966. The previous peak of $8,940 was set in July 2008.
“Worries over monetary tightening in China sparked an aggressive knee-jerk selloff” pressuring all base metals, Leon Westgate, an analyst at Standard Bank Plc in London, said in a report.
Also on the LME, aluminum, lead, zinc, nickel and tin dropped.
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