Jun 28, 2012 (Dow Jones) NEW YORK--Copper futures slid Thursday on expectations for sluggish global growth and as some investors bet that the ongoing two-day European Union summit won't result in strong measures to support the euro zone's banking system.
The most actively traded copper contract, for July delivery, fell 2.35 cents, or 0.7%, to settle at $3.2360 a pound on the Comex division of the New York Mercantile Exchange.
European leaders are meeting in Brussels Thursday and Friday to discuss potential steps toward closer fiscal integration, including a euro-zone banking union and a debt redemption fund. However, German Chancellor Angela Merkel lowered optimism Tuesday when she said she didn't anticipate full mutualization of European debt in her lifetime.
"Expectations for the summit are mixed with traders wary of repeated failures to once and for all stem the decline in the health of the region," RBC Capital Markets said in a note.
The euro was recently down 0.4% at $1.24155 against the dollar, after hitting a three-week low earlier in the day. A stronger dollar can weigh on copper prices, making traders using other currencies spend more for the dollar-denominated metal.
Copper, an industrial metal used widely in manufacturing and construction, is sensitive to changes in global demand. Traders are predicting that demand from China, the world's top copper consumer, will weaken, said Dave Meger, vice president and director of metals trading for Vision Financial Markets. "There are concerns about demand moving forward," Meger said. "It's not surprising to see the weights on the industrial commodities."
Copper futures rebounded a bit Thursday morning when fresh U.S. jobless claims and revised gross domestic product data were released. However, the numbers varied little from expectations, and overall investor optimism was muted.
"The EU summit, starting today, looks set to dominate proceedings into the weekend," wrote Standard Bank's Leon Westgate in a note to clients.
Copper settlements (ranges include electronic and pit trading):
Jul $3.3260; down 2.35 cents; Range $3.3120-$3.3450
Aug $3.3300; down 2.50 cents; Range $3.3155-$3.3475