Sep 22, 2011 NEW YORK (Dow Jones)--Copper futures dived to their lowest level in a year Thursday as investors dumped growth-sensitive assets on the view that the global economy is heading for a renewed slowdown that would slash metals demand.
The most actively traded copper contract, for December delivery, was recently down 26.55 cents, or 7%, at $3.4985 a pound on the Comex division of the New York Mercantile Exchange.
A preliminary reading of manufacturing in China, the world's top copper consumer by a wide margin, showed continued contraction in September. Activity in the euro zone this month came in weaker than expected.
Copper is sensitive to the economic outlook because it is used across a wide range of industries, and futures were already under pressure this week from a weaker growth outlook.
"These (purchasing managers indexes) have been signaling a slowdown for several months," said Frank Lesh, a broker with FuturePath Trading. "Not only China, but really everybody."
A bleak economic outlook voiced Wednesday by the Federal Reserve rattled some investors, analysts said, and the central bank's newly announced program to shift its portfolio toward longer-term government debt failed to support prices of risky assets.
The benchmark copper contract fell as low as $3.482 a pound, the lowest intraday price since September 2010.
Weaker global equities markets added to the drag on the copper market Thursday, as major European and U.S. indexes showed steep losses.