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Copper in London Drops for a Fourth Day on Concern Global Growth to Slow
Sep 6,2011 13:49CST
industry news
Source:SMM
Copper futures declined amid concern that the euro-zone nations will be unable to control the sovereign-debt crisis, damping the outlook for the global economy and curb demand for raw materials.

Sept. 6 (Bloomberg) –Copper futures declined amid concern that the euro-zone nations will be unable to control the sovereign-debt crisis, damping the outlook for the global economy and curb demand for raw materials.

Three-month copper on the London Metal Exchange dropped as much as 0.5 percent to $8,914.75 a metric ton and traded at $8,925 as of 11 a.m. Singapore time. December-delivery copper on the Comex in New York dropped 1.5 percent to $4.0615 a pound.

The cost of insuring against default on European sovereign and financial debt surged to records yesterday. Finance ministers from Germany, Finland and the Netherlands will meet today to discuss a Finnish demand for collateral in a bailout for Greece, while the Italian Senate will debate the nation's austerity plan amid a strike called by the nation's biggest union. China's services activity slowed in August, according to a report compiled by Markit.

"The economic outlook is really weak," David Thurtell, head of metals research at Citigroup Inc. said by phone from Sydney today. "There's not a lot to be bullish about base metals in the near term."

Citigroup lowered its 2011 copper price forecast by 6.2 percent to $9,099 a ton and nickel by almost 14 percent, citing the bank's reduced economic growth forecast for the U.S., the euro zone and India. Copper, used in power cables and construction, has lost 12 percent from record $10,190 touched on Feb. 15.

Falling Production

Still, tight supplies amid falling production and mine strikes will support copper, Australia and New Zealand Banking Group Ltd analysts Mark Pervan and Natalie Robertson said in a report.

Copper output in Chile, the world's biggest producer of the metal, is poised to decline this year after snowstorms and strikes hit mines owned by BHP Billiton Ltd. and Codelco, Mining Minister Hernan de Solminihac said yesterday in Sydney. Chilean output fell 2.2 percent in the first half to 2.57 million metric tons. The nation produced 5.42 million tons last year.

Workers at Freeport-McMoRan Copper & Gold Inc. (FCX)'s Grasberg mine in Indoensia may hold another strike from Sept. 15 if the company fails to make a new offer on wages increases, Virgo Solossa, head of organizational affairs at the mine's labor union said yesterday. Grasberg's copper production at the mine fell to 1.22 billion pounds (553.4 million kilograms) last year from 1.41 billion pounds in 2009, according to the website.

Copper for November delivery dropped 0.6 percent to 66,730 yuan ($10,443) a ton on the Shanghai Futures Exchange.

Aluminum and nickel were little changed at $2,385 a ton and $20,918, respectively. Lead was unchanged at $2,435 and zinc gained 0.8 percent to $2,190 a ton. Tin hadn't been traded by 10:29 a.m. in Singapore.

 

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