Copper, Aluminum Drop to 27-Month Lows Amid Recession Concern
London, Sept. 20 (Bloomberg) -- Copper and aluminum prices
fell to 27-month lows amid growing expectations the world economy
will enter a recession, reducing demand for the metals from users
such as aircraft makers and electronics companies.
``There are not many people who don't believe the world is
going into recession,'' said Ted Arnold, an analyst at Prudential
Bache in London. ``Until you get a lot of production cuts (at
mines), people will continue to sell them.''
The drop in metal prices sent the Bloomberg Europe Metals &
Mining Index to its biggest decline in 17 months. Evidence of
slowing industrial demand since last week's terrorist attacks in
the U.S. already appeared: aircraft maker Boeing Co. announced
30,000 job cuts, while Ford Motor Co., General Motors Corp.,
DaimlerChrysler AG and other U.S. carmakers idled factories.
Aluminum for delivery in three months dropped as much as $7,
or 0.5 percent, to $1,355 a metric ton, its lowest since June 1999
on the London Metal Exchange, making a 13 percent decline so far
this year. Copper fell as much as $9, or 0.6 percent, to $1,425 a
ton, also its lowest since June 1999 and making a drop of 22
percent since the start of the year.
Rio Tinto Plc shares fell as much as 8.4 percent today, while
France's Pechiney SA, an aluminum maker, dropped as much as 5.5
percent.
Since the terrorist attacks, aluminum has declined 2.7
percent, while copper has dropped 2.8 percent.
The declines today were accelerated by a drop through so-
called support levels -- those at which traders in the past had
bought the metals -- at $1,360 for aluminum and $1,430 for copper,
analysts said.
Traders' concern about recession and the possibility of
military action by the U.S. and its allies against Afghanistan or
other countries is limiting activity in the markets.
``There's talk of a 10-year campaign (against terrorism),''
said Robin Bhar, an analyst at Standard Bank in London. ``The
markets want the war to be over in a matter of weeks.'' |
