Mar.28 (Bloomberg) --Copper, aluminum and lead declined as radiation from the stricken Japanese nuclear plant may be worsening and as German Chancellor Angela Merkel’s coalition was defeated in state elections, reducing optimism over the recovery.
Three-month-delivery copper on the London Metal Exchange fell for the third day, losing as much as 1.8 percent to $9,510.25 a metric ton, before trading at $9,526 at 3:11 p.m. Singapore time. Zinc, nickel and tin retreated.
"The situation in Japan doesn’t seem to be improving and this is hurting sentiment across the financial markets,” Pan Jinghua, an analyst at Citic Futures Co., said from Shanghai.
Copper futures on the Comex in New York fell as much as 2 percent to $4.3315 a pound, while metal for June-delivery on the Shanghai Futures Exchange dropped as much as 2.3 percent to 70,700 yuan ($10,774) a ton and ended at 71,070 yuan.
Radiation is hampering efforts to cool a nuclear plant damaged by the March 11 earthquake and tsunami in Japan. The spread of radioactive contamination adds to the drag on economic growth, already hurt by quake-related damage of as much as 25 trillion yen ($306 billion).
"The dollar has been doing well recently as concerns about Europe’s debt crisis have resurfaced and this puts pressure on metals,” said Pan.
Merkel’s Christian Democratic Union didn’t win enough votes in yesterday’s election for a majority, marking the end of the party’s 58-year state rule and triggering losses in the euro. The common currency also weakened against the dollar for a second day after EU leaders pared the startup capital for an emergency-aid fund, following a cut in Portugal’s credit rating.
Aluminum in London dropped 0.6 percent to $2,625.25 a ton, zinc lost 1.1 percent to $2,350 a ton, lead declined 1.5 percent to $2,631 a ton and nickel fell 1.6 percent to $26,608 a ton. Tin declined 0.5 percent to $31,650 a ton.