Jul. 20 (Bloomberg) –Copper fell for the first time in four days in London as some investors viewed recent gains as excessive amid concern that the European debt crisis may slow global economic growth, hurting demand. Zinc also dropped.
Three-month copper shed as much as 0.7 percent to $9,773 a metric ton on the London Metal Exchange, and traded at $9,797 at 4:47 p.m. in Shanghai. The contract gained 1.5 percent yesterday to a more than three-month high after U.S. housing starts were higher than expected. Zinc lost 1.1 percent to $2,462.25 a ton.
Greek Prime Minister George Papandreou travels to Brussels tomorrow to meet with European Union leaders as officials struggle to agree on measures to restore confidence in the euro region's creditworthiness after the last year's rescue of Greece.
"The gains last night were considered somewhat excessive, so we see some investors reaping profits today, given copper's fundamentals and the market environment," Pang Juan, an analyst at Jinrui Futures Co., said by phone from Shenzhen.
Copper for September delivery shed 1.2 cents, or 0.3 percent, to $4.4565 a pound on the Comex in New York. The most- active contract on the Shanghai Futures Exchange, for delivery in October, fell 0.2 percent to 72,680 yuan ($11,257) a ton.
European policy makers are divided on how to prod investors into financing a new bailout package for Greece. "It could be a make-or-break moment for where Europe is going," Prime Minister Papandreou said in interview ahead of the summit.
In China, the world's largest copper user, demand for copper is growing at a slower rate than last year, Duncan Hobbs, an analyst at Macquarie Group Ltd. , said by phone yesterday after a trip to the country. Copper is used in pipes and wires.
China should raise borrowing costs as real interest rates are negative, He Keng, a vice chairman of the financial and economic affairs committee of the National People's Congress, said at a forum in Beijing today.
So-called real interest rates are typically defined as the nominal interest rate less inflation. The People's Bank of China has increased interest rates five times since October to stem inflation that reached a three-year high last month.
In the U.S., work began last month on 629,000 houses at an annual pace, up 15 percent from May and the highest level in five months, figures from the Commerce Department showed. The U.S. is the world's second-largest copper consumer.
Vale SA, the world's largest iron-ore producer, won't reach a target to produce 1 million tons of copper by 2015, according to Jose Carlos Martins, director for marketing and sales at the Rio de Janeiro-based company.
"We won't be able to reach it. We would have to make acquisitions or new discoveries," Martins said at an event in Sao Paulo. "The 1 million metric tons still exists, but it's difficult to reach it by 2015."
Aluminum was little changed in London to $2,548.75 a ton, while lead declined 0.7 percent to $2,751.25 a ton. Nickel shed 0.2 percent to $24,081 a ton, and tin dropped 0.3 percent to $27,800 a ton.