Copper Drops, Paring Monthly Gain, on Concern U.S. Recovery Is Faltering

Aug 31 (Bloomberg)--

Copper fell for the first session in three in Asia, paring a second monthly advance, as salaries in the U.S. grew slower than forecast, raising concerns that the economic recovery may be faltering.

The metal for three-month delivery dropped as much as 1.2 percent to $7,368 a metric ton on the London Metal Exchange compared with the close on Aug. 27, and traded at $7,377 at 3:10 p.m. in Singapore. The market was shut yesterday for a holiday. Copper for December delivery on the Shanghai Futures Exchange fell 1.6 percent to close at 58,440 yuan ($8,583) a ton.

"Weak personal-income data indicated that the U.S. economic recovery may be slowing down,” Tan Wentao, an analyst at HNA Topwin Futures Co., said from Shanghai. “Even if there is a recovery, it is still fragile.”

The Commerce Department reported that incomes rose 0.2 percent in July, less than the 0.3 percent median estimate of 66 economists surveyed by Bloomberg News. The U.S. is the world’s second-largest copper user after China.

Some copper “investors chose to lock in profits following gains in the past few days,” Wang Mingyi, an analyst at Galaxy Futures Co., said from Beijing. Losses in U.S. and Asian stocks and resistance for London copper at $7,500 drove sales, Wang said.

Resistance levels are marked by clusters of sell orders.

The metal is still 1.1 percent higher in London this month, extending the 12 percent advance in July. Last month’s gain was the best performance since August 2009, and follows three straight monthly falls from April to June.

Investors will look to U.S. manufacturing and payroll reports due later this week for further evidence of a slowdown, HNA Topwin’s Tan said. The Labor Department will report jobless and payrolls data on Sept. 3, while the Institute for Supply Management’s factory gauge is due for release tomorrow.

Aluminum in London fell 0.2 percent to $2,053 a ton, zinc declined 1.3 percent to $2,068.25 a ton, and lead slid 2 percent to $2,049 a ton. Nickel lost 1.2 percent to $20,800 a ton, and tin dropped 1.9 percent to $21,220 a ton.