July 2 (Bloomberg) -- Copper may fall after reports pointed to a weakening of manufacturing in China, the world's largest consumer of the industrial metal.
Nine of 17 analysts, investors and traders surveyed by Bloomberg, or 53 percent, said the metal will decline next week. Seven predicted higher prices and one forecast little change.
Copper for delivery in three months was down 6.3 percent for this week at $6,344.75 a metric ton on the London Metal Exchange at 4:04 p.m. yesterday.
"We anticipate a return to doom and gloom next week as there are too many macro-economic problems out there with China slowing, the U.S. labor market and a possible downgrade of Spain," said Randy North, a trader at RBC Capital Markets in London.
In China, the Purchasing Managers' Index fell more than forecast by economists, to 52.1 from 53.9 in May, the Federation of Logistics and Purchasing said yesterday. HSBC Holdings Plc's manufacturing index slid to a 14-month low. The reports added to concern that a Chinese slowdown combined with austerity measures in Europe may undermine the global recovery. Moody's Investors Service said two days ago it may cut Spain's top credit rating.
Figures from ADP Employer Services on June 30 showed that U.S. companies expanded payrolls by 13,000, the smallest gain since February. The ADP figures were forecast to show a gain of 60,000 jobs, according to a Bloomberg survey. The U.S. Institute for Supply Management's manufacturing index for June released yesterday fell more than economists forecast to 56.2 from 59.7 in May. The U.S. is the second-largest copper user.
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of June 25.
The weekly copper survey has forecast prices accurately in 45 of the past 93 weeks, or 48 percent of the time.
This week's survey results: Bullish: 7 Bearish: 9 Hold: 1