Copper Prices Fall on Signs of Economic Slowdown in Europe
9/20/0 10:50 (New York)
Copper Prices Fall on Signs of Economic Slowdown in Europe
New York, Sept. 20 (Bloomberg) -- Copper fell almost 2
percent, the biggest drop in three months, as signs of an economic
slowdown in Europe raised concern that demand from builders and
manufacturers could weaken.
German business confidence fell in August for a third month
and Italy's economy grew less than expected in the second quarter.
A weakening of demand for copper wire and pipes in Europe could
end the five-month rally that sent prices to a three-year high
last week.
``Copper being an industrial metal is responding to
manufacturing worries,'' said Rick Hirsch, president of Stamford,
Connecticut-based Sogemin Metals Inc., a subsidiary of Belgian
mining company Union Miniere SA. ``There's a general idea that
economies are slowing globally.''
Copper for December delivery fell as much as 1.55 cents, or
1.7 percent, to 91.5 cents a pound on the Comex division of the
New York Mercantile Exchange, the biggest one-day decline for a
most-active contract since June 20. While prices have dropped 3.1
percent from the three-year high of 94.4 cents on Sept. 13, they
still are up 23 percent from an eight-month low in April.
In London, copper for delivery in three months fell as much
as $31, or 1.6 percent, to $1,967 a metric ton (89.22 cents a
pound) on the London Metal Exchange.
Accelerating economic growth in Europe contributed to this
year's rally in copper prices. European demand for copper reached
1.6 million tons during the first four months of this year, up 13
percent from the same period in 1999, the World Bureau of Metal
Statistics said in a recent report.
Europe accounts for 30 percent of world copper consumption,
and Germany and Italy are the biggest users of the metal in the
region, the U.K.-based private research firm said.
Rising U.S. Inventories
Rising inventories in Comex-monitored warehouses could signal
weakening demand for copper in the U.S. Supplies of the metal have
risen for three straight reporting days, gaining 0.5 percent to
62,366 tons since reaching a two-year low on Thursday.
Pittsburgh-based Alcoa Inc., the world's biggest aluminum
maker, said this week that third-quarter profit will be below
analysts' forecasts because of slowing sales in the building and
transportation industries and increased energy costs.
Builders account for 40 percent of U.S. demand for copper,
according to the Copper Development Association, a New York-based
industry group. A typical single-family home contains about 440
pounds of the metal, according to the association.
--Claudia Carpenter in the New York newsroom (212) 318-2346 or at
ccarpenter2@bloomberg.net/jb |
