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Copper Falls as Sagging European Economy May Damp Metal Demand
Aug 17,2011 09:52CST
industry news
Source:SMM
Copper fell for the first time in four sessions as the slowest growth in the euro-area economy in two years spurred concern that metal demand will decline.

Aug. 17 (Bloomberg) –Copper fell for the first time in four sessions as the slowest growth in the euro-area economy in two years spurred concern that metal demand will decline.

The European Union statistics office said today that gross domestic product rose 0.2 percent in the second quarter from the first, In Germany, the region's biggest economy, growth almost stalled. U.S. housing starts fell in July, and building permits, a proxy for future construction, also dropped, government figures showed today.

"The focus now is on worsening macro readings, particularly out of the U.S. and Europe," Edward Meir, a senior analyst at MF Global Holdings Ltd. in Darien, Connecticut, said in a report. "Prices will continue to struggle over the balance of the year."

Copper futures for December delivery declined 3.8 cents, or 0.9 percent, to close at $4.015 a pound at 1:16 p.m. on the Comex in New York. The price has dropped 10 percent this month amid escalating debt woes in the U.S. and Europe.

The metal, which earlier fell as much as 1.9 percent, pared losses after a report showed U.S. industrial production climbed in July by the most this year.

On the London Metal Exchange, copper for delivery in three months dropped $78, or 0.9 percent, to $8,830 a metric ton ($4.01 a pound).

Danske Bank A/S lowered its 2012 price forecast to $9,800 from $10,125, citing a slowing economy. The metal has averaged $9,412 this year.

"With leading indicators expected to decline further, recession fears are likely to stay elevated and potentially even rise further," Christin Tuxen, a Copenhagen-based bank analyst, said in a report.

Lead, zinc and tin also fell in London. Nickel rose, and aluminum unchanged.

 

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