Copper and Mining Stocks Slump After Sluggish Manufacturing Data

  • Anglo American slides 13% as factory data adds to demand woes
  • LME copper stockpiles surge 3.5 percent, most since August

Copper and mining stocks slumped on concern that demand for metals is weakening following sluggish manufacturing data around the world.

Most base metals retreated on the London Metal Exchange as the bourse reopened following a U.K. holiday on Monday. Anglo American Plc and Freeport-McMoRan Inc. led declines among producers.

A private factory gauge in top consumer China showed contraction for a 14th month, while data this week showed U.S. manufacturing growth cooled and similar U.K. index unexpectedly shrank for the first time in three years in April. In Australia, one of the biggest metals producers, an interest-rate cut weakened its dollar, boosting the appeal of its exports.

“There’s a lot of nervousness in the market,” Peter Thomas, a senior vice president at Zaner Group LLC, a metals broker in Chicago, said in a telephone interview. If Chinese manufacturing “continues to contract, local demand is going to go down.”

Copper Price

Copper for delivery in three months slipped 2.6 percent to settle at $4,920 a metric ton at 5:51 p.m. on the LME, the biggest loss since April 7. Prices retreated after closing on April 29 at $5,050, the highest since March 22.

Stockpiles of the metal in warehouses tracked by the LME climbed 3.5 percent, the most since August, on deliveries into Asia, bourse data show. Inventories are at the highest in six weeks.

“Disappointing manufacturing data might be one of the reasons, but the unexpected rate decrease in Australia may also be a factor,” Eugen Weinberg, the head of commodities research at Commerzbank AG in Frankfurt, said by phone.

A gauge of 18 large global base metal producers tracked by Bloomberg Intelligence slumped 5.7 percent, set for the biggest loss since March 8. Anglo American plunged 13 percent in London, while Freeport lost 8.6 percent in New York.

In other metals:

  • Aluminum, lead and zinc all declined more than 2 percent on the LME.
  • Tin rose while nickel gained as much as 2.7 percent, touching the highest since November.
  • On the Comex in New York, copper futures slipped 2.1 percent.
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