Mar.10 (Bloomberg) --Copper futures fell to the lowest in more than two months on concern that demand will wane as higher energy costs slow the global economy.
Crude oil reached a 29-month high in New York on March 7 and rose as much as 0.9 percent today as Libyan leader Muammar Qaddafi stepped up attacks on rebel forces, fueling speculation that the conflict will persist. Copper stockpiles monitored by the London Metal Exchange have jumped 22 percent from last year’s low on Dec. 10.
"The price of oil is a game changer,” said Matthew Zeman, a market strategist at Kingsview Financial in Chicago. "People are taking the risk trade off and going back to risk-aversion mode.”
Copper futures for May delivery dropped 12.6 cents, or 2.9 percent, to close at $4.2125 a pound at 1:20 p.m. on the Comex in New York, after touching $4.183, the lowest for a most-active contract since Dec. 20. The metal has declined 9.6 percent from a record $4.6575 on Feb. 15.
"Short-term trends have turned bearish,” Zeman said. The metal may drop to $4.05 in a few weeks should prices close below $4.20, he said.
Copper premiums in Europe slumped to a two-year low, Standard Chartered Plc said in a report dated yesterday.
"Demand in China is still lackluster,” analyst Dan Smith said. The country is the world’s largest copper user.
On the LME, copper for delivery in three months slid $255, or 2.7 percent, to $9,275 a metric ton ($4.21 a pound).
Aluminum, lead, nickel, tin and zinc also declined in London.