Copper Falls to 5-Month Low on European Demand ConcernsJoe Deaux and Laura Clarke
Copper futures dropped below $3 a pound to the cheapest in more than five months as signs of deepening economic malaise in Europe dimmed demand prospects.
European equities tumbled the most in 15 months on concern that an asset-buying program announced today by European Central Bank President Mario Draghi won’t be enough to boost inflation and revive the economy. A report yesterday showed euro-area factories expanded at the slowest clip in more than a year.
“Mr. Draghi didn’t give us anything I would get excited about to say, ’Wow, let’s buy copper, things are going to get spectacular in Europe.’” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview.
Copper futures for December delivery dropped 1.2 percent to settle at $2.9985 at 1:17 p.m. on the Comex in New York. Earlier, the price touched $2.9855, the lowest for a most-active contract since April 16.
National Day holidays in China, the world’s biggest consumer of copper, kept the Shanghai Futures Exchange shuttered today through Oct. 7.
On the London Metal Exchange, copper for delivery in three months fell 1.2 percent to $6,601 a metric ton ($2.99 a pound). The price has declined 10 percent this year.
Operations resumed at Freeport-McMoRan Inc.’s Grasberg copper mine in Indonesia after open-pit work was suspended because of an accident on Sept. 27. Grasberg had still been shipping concentrate, or partly treated ore. Indonesia barred exports of unprocessed mineral ores in January.
“I would expect Grasberg to have accumulated quite substantial stocks of concentrates during the first half due to the export ban, so it should take a while before these are exhausted,” Nic Brown, the head of commodities research at Natixis SA in London, said in an e-mail.
Nickel, aluminum, lead and zinc fell in London, while tin gained.