Oct 08, 2012 (Dow Jones) NEW YORK--Copper futures fell to a one-week low on Monday on worries about demand prospects for the industrial metal after the World Bank reduced its economic growth forecast for top metals consumer China.
The World Bank on Monday said China's economy would expand by 7.7% this year, down from the 8.2% growth previously expected. Worries about the pace of economic growth in China, set to slow this year amid weakening export markets to Europe and elsewhere, have kept pressure on copper prices this year.
China accounts for about 40% of copper consumption, making global prices sensitive to shifts in the outlook for the country. The metal, used widely in construction and manufacturing, is a key ingredient in China's rapid growth during the last decade. Growth in Chinese demand has outstripped increases in world mine production, helping keep the global market tight and prices at historically high levels in recent years.
The World Bank's cut, INTL FCStone analyst Edward Meir said in a note, was making the case that "the slowdown in China could get worse and last longer than expected."
The most actively traded copper contract, for December delivery, fell six cents, or 1.6%, to settle at $3.718 a pound on the Comex division of the New York Mercantile Exchange, the lowest since Sept. 26.
Also weighing on sentiment on Monday were lingering worries about Europe's financial system with euro-zone finance ministers set to meet in Luxembourg to discuss Spain's banking crisis and other issues. Global equity markets were mostly weaker, adding pressure to the copper market.
Copper had edged higher last week, gaining 0.5% in thin trade with Chinese markets closed for a weeklong holiday. Trading volume remained light on Monday. U.S. bond markets and government agencies were closed for the Columbus Day holiday, and Japanese markets were shut for a public holiday.
Copper settlements (ranges include electronic and pit trading):
Oct $3.7270; down 5.90 cents; Range $3.7235-$3.7610
Dec $3.7180; down 6.00 cents; Range $3.7020-$3.7700