Copper Swings Between Gains and Drops as China Orders Debt Audit
The review, ordered by the State Council, underscored dangers to the economy from borrowing by local governments and an expansion of non-traditional sources of credit. The Bloomberg U.S. Dollar Index, measuring the greenback against 10 currencies, headed for a sixth drop in seven sessions.
“The announcement to audit local government debt in China plus CTA selling last Friday led to a weak metals market,” Richard Fu, director for Asian commodity trading at Newedge Group SA in London, said in a report today, referring to Commodity Trading Advisors.
Copper for delivery in three months slipped 0.1 percent to $6,855 a metric ton by 10:42 a.m. on the London Metal Exchange after climbing as much as 0.1 percent. Prices reached $6,820, the lowest since July 10. Copper for delivery in September fell 0.1 percent to $3.102 a pound on the Comex in New York.
China’s economy slowed for nine of the last 10 quarters. An official gauge due Aug. 1 will show manufacturing in the nation shrank this month, according to economists surveyed by Bloomberg. A weaker dollar makes raw materials priced in the currency cheaper in terms of other monies.
Money managers cut their net-short position, or wagers on lower copper prices, to 12,974 Comex futures and options as of July 23, U.S. Commodity Futures Trading Commission data showed.
Federal Reserve policy makers will start a two-day meeting tomorrow. The central bank has said it may start paring stimulus aimed at stoking growth in the U.S., the second-biggest copper user, if the economy meets its forecasts.
Rio Tinto Group said it’s delaying work on a $5.1 billion underground expansion of its Oyu Tolgoi copper mine pending financing approval by Mongolia’s parliament. Rio made its first commercial copper shipment from the mine this month.
Copper stockpiles monitored by the LME fell for a ninth session to 618,775 tons, daily exchange figures showed. Orders to draw metal from warehouses slid 1 percent to 316,500 tons.
Tin, nickel and zinc fell in London. Aluminum rose and lead was little changed.
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