Nov 10, 2011 NEW YORK (Dow Jones)--Copper futures fell to a two-week low on Thursday, weighed by the view that demand for the industrial metal will likely slip despite signs of progress in combating the euro zone's debt crisis.
The most actively traded copper contract, for December delivery, fell 6.70 cents, or 2%, to settle at $3.3740 a pound on the Comex division of the New York Mercantile Exchange, the lowest settlement price since Oct. 21.
U.S. equities and crude oil pushed higher Thursday, propped up by the view that swift action by Italy's leadership may yet keep the debt-laden country from having to seek a bailout. Italy's borrowing costs dipped amid market chatter that the European Central Bank was buying the country's bonds. And the escalation of worries about Greece paused after former ECB vice president Lucas Papademos was selected to be the next prime minister.
But copper futures didn't catch a boost from the developments, as investors bet that regardless of progress in righting the financial situation of the currency union, demand for industrial metals would suffer from fading growth. The European Commission, the European Union's executive body, on Thursday slashed its growth forecasts for the region to 0.6%, and said it can't rule out the possibility of a "deep, prolonged" recession in the 27-nation bloc.
Copper is sensitive to the growth outlook because of its widespread uses in industry and manufacturing.
Trade data from top metals consumer China also failed to spur buying in copper futures.
Copper bulls have placed their bets largely based on economic strength in China and other emerging economies as growth in Europe and the U.S. showed signs of slowing.
China accounted for about 40% of refined copper consumption last year, but its imports this year have slipped as manufacturers relied on inventories and Beijing took steps to cool the country's overheating economy. Through October, year-to-date imports were 13.5% below 2010 levels.
Adding to the concerns were Thursday's trade surplus data, as exports failed to pick up by as much as economists had expected.
"We already know [Europe] is in a recession, now China is saying their export business is seeing a slowdown," said Ira Epstein, director of the Ira Epstein division of the Linn Group. "That puts a top in copper."
Chinese copper imports ticked higher in October for a third consecutive month, rising by 0.8% from September levels. Some market participants said the increase was likely evidence of bargain buying after the steep slide in copper prices in September, rather than firming demand.
Copper settlements (ranges include electronic and pit trading):
Nov $3.3725; down 6.65 cents; Range $3.3495-$3.3720
Dec $3.3740; down 6.70 cents; Range $3.3180-$3.4290