Copper Set for Biggest Weekly Drop in 16 Months as Metals SlideBloomberg News
Copper headed for a bear market, losing the most in 16 months this week, on concern that slowing growth in China will reduce demand. Aluminum and nickel also declined.
Copper for delivery in three months lost as much as 3 percent to $6,875 a metric ton on the London Metal Exchange, before trading at $7,013 by 2:21 p.m. Shanghai time. It has lost 5.3 percent this week, the biggest drop since the week ended Dec. 16, 2011. The metal retreated to $6,800 yesterday, the lowest since October 2011, before erasing the drop at the close. A close at $6,992 would be 20 percent below the February 2012 closing high, deemed a bear market by many investors.
Goldman Sachs Group Inc. lowered its forecast for 2013 growth in China, the biggest metals consumer, to 7.8 percent from 8.2 percent, citing “softer-than-expected first quarter GDP.” Stockpiles monitored by the London Metal Exchange rose 0.6 percent to 612,350 tons, the highest since Sept. 8, 2003, bourse data showed. Canceled warrants, or orders to remove the metal from warehouses, fell for a fourth day to 148,575 tons, the lowest since April 8.
“The biggest concern is still on China demand amid huge inventories,” said Fang Junfeng, an analyst at Shanghai CIFCO Futures Co. “Market sentiment is very negative, while end users in Shanghai have been on the sidelines in the last couple of days, despite the slump.”
Metal for delivery in August gained 0.6 percent to 50,820 yuan ($8,224) a ton on the Shanghai Futures Exchange, after falling to a daily lower limit yesterday. Copper for delivery in July dropped 1.3 percent to $3.177 per pound on the Comex.
“It’s still too early to say copper has found support at the current level,” Xiong Dabiao, an analyst at Minmetals Futures Co., said by phone from Shanghai. “We need to watch out for any negative news development from either Europe or China.”