Copper Slumps On US Data; Falls 12% In May-Shanghai Metals Market

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Copper Slumps On US Data; Falls 12% In May

Industry News 08:49:28AM Jun 01, 2012 Source:SMM

May 31, 2012 NEW YORK (Dow Jones)--Copper futures slumped to another five-month low on Thursday, as weak U.S. economic data and continued turmoil in Europe's rattled financial system painted a gloomy outlook for demand for the industrial metal.

The most actively traded copper contract, for July delivery, fell 2.45 cents, or 0.7%, to settle at $3.3655 a pound on the Comex division of the New York Mercantile Exchange.

In the U.S., the world's No. 2 copper consumer behind China, government data showed economic growth during the first quarter slowed by more than previously thought. Strength in the labor market also faded a bit, with both private-sector hiring in May and weekly unemployment applications coming in worse than expected.

Adding to the gloom, a closely-watched index of Chicago-area factory output fell in May to its lowest level since September 2009, raising fears the U.S. could be headed for another recession.

"The trend certainly isn't pretty," said Bart Melek, head of commodity strategy with TD Securities. "You have to worry that U.S. growth is faltering again."

The copper market can react swiftly to shifts in the economic outlook because of the metal's widespread uses across industries. The malleable, electrically conductive metal is used in automobiles, power cables, consumer electronics and appliances, among other applications.

Copper futures slumped 12% in May, hitting a series of 2012 lows as worries about Europe's banking crisis spurred traders to dump copper and other assets seen as risky when global growth slips.

The month's selling has come as Greece appears closer to an exit of the euro zone after a set of contentious elections failed to produce a coalition government. Concern about a potential breakup of the currency union has pushed up Spain's borrowing costs and sent the country's banking system toward a cash crunch.

Traders have flocked to the U.S. Dollar for safety, pushing it higher and dragging on dollar-denominated copper by making the futures appear more expensive for buyers using other currencies.

The rate of growth in China was also further called into question during the month after weakness in the country's exports to Europe hit domestic industries there.

Copper settlements (ranges include electronic and pit trading):
Jun $3.3625; down 2.40 cents; Range $3.3400-$3.3815
Jul $3.3655; down 2.65 cents; Range $3.3415-$3.4055

 

Price

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#1 Refined Cu
Oct.11
47060.0
325.0
(0.70%)
Standard-Grade Copper
Oct.11
47050.0
325.0
(0.70%)
High-Grade Copper
Oct.11
47070.0
325.0
(0.70%)
Guixi copper
Oct.11
47075.0
320.0
(0.68%)
Low-quality copper
Oct.11
46995.0
300.0
(0.64%)

Copper Slumps On US Data; Falls 12% In May

Industry News 08:49:28AM Jun 01, 2012 Source:SMM

May 31, 2012 NEW YORK (Dow Jones)--Copper futures slumped to another five-month low on Thursday, as weak U.S. economic data and continued turmoil in Europe's rattled financial system painted a gloomy outlook for demand for the industrial metal.

The most actively traded copper contract, for July delivery, fell 2.45 cents, or 0.7%, to settle at $3.3655 a pound on the Comex division of the New York Mercantile Exchange.

In the U.S., the world's No. 2 copper consumer behind China, government data showed economic growth during the first quarter slowed by more than previously thought. Strength in the labor market also faded a bit, with both private-sector hiring in May and weekly unemployment applications coming in worse than expected.

Adding to the gloom, a closely-watched index of Chicago-area factory output fell in May to its lowest level since September 2009, raising fears the U.S. could be headed for another recession.

"The trend certainly isn't pretty," said Bart Melek, head of commodity strategy with TD Securities. "You have to worry that U.S. growth is faltering again."

The copper market can react swiftly to shifts in the economic outlook because of the metal's widespread uses across industries. The malleable, electrically conductive metal is used in automobiles, power cables, consumer electronics and appliances, among other applications.

Copper futures slumped 12% in May, hitting a series of 2012 lows as worries about Europe's banking crisis spurred traders to dump copper and other assets seen as risky when global growth slips.

The month's selling has come as Greece appears closer to an exit of the euro zone after a set of contentious elections failed to produce a coalition government. Concern about a potential breakup of the currency union has pushed up Spain's borrowing costs and sent the country's banking system toward a cash crunch.

Traders have flocked to the U.S. Dollar for safety, pushing it higher and dragging on dollar-denominated copper by making the futures appear more expensive for buyers using other currencies.

The rate of growth in China was also further called into question during the month after weakness in the country's exports to Europe hit domestic industries there.

Copper settlements (ranges include electronic and pit trading):
Jun $3.3625; down 2.40 cents; Range $3.3400-$3.3815
Jul $3.3655; down 2.65 cents; Range $3.3415-$3.4055