Copper Extends Drop to Lowest in Four Years Amid Greece ConcernDebarati Roy and Agnieszka de Sousa
Copper fell to the lowest in more than four years amid concern that Greece will leave the euro area and default on debt, crimping the outlook for European demand.
Some Greek politicians have promised to ditch austerity measures if they win elections this month, adding to investor unease and helping push the euro to an almost nine-year low against the dollar. Copper slid 17 percent in 2014 amid signs of slowing demand from Europe and China, the world’s biggest user. Today, the LMEX Index of the six main metals traded in London slumped to the lowest since 2010.
“The Greek issue is one more negative factor,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “Unless the China situation improves or they announce some major stimulus, I don’t think concerns about copper are going away.”
Copper futures for March delivery declined 1.8 percent to settle at $2.766 a pound at 1:23 p.m. on the Comex in New York, the biggest drop for a most-active contract since Dec. 15. Earlier, prices reached $2.744, the lowest since June 2010.
China’s official Purchasing Managers’ Index declined to the lowest in 18 months, data showed last week.
Rising worries about Chinese growth, absence of Chinese buying, supply surpluses on the horizon and the strengthening dollar are the main drivers of lower prices, RBC Capital Markets Ltd. said in a note today.
On the London Metal Exchange, copper for delivery in three months declined 1.8 percent to $6,145 a metric ton ($2.79 a pound), the biggest drop since Nov. 28.
Stockpiles of the metal monitored by the LME climbed 0.8 percent to 178,425 tons, the highest since May. Inventories in China tracked by the Shanghai Futures Exchange climbed to 111,915 tons, the highest since April, data showed Jan. 1.
Aluminum, tin, lead and zinc also fell in London, while nickel settled higher.