Copper Falls on Concern Slowing World Economy Will Cut Demand
New York, Oct. 19 (Bloomberg) -- Copper futures fell for the
fifth time in six sessions on concern that economic disruptions
following terrorist attacks last month will curb metals demand for
months to come.
German business confidence in September posted the biggest
drop in almost 28 years, a sign the economy of the third-biggest
copper user may shrink, a report today showed. Worldwide copper
inventories have more than doubled this year as slowing economies
reduced demand for wire and pipes.
``There's nothing coming but bearish news,'' said Lawson
Spence, a senior metal specialist at Salomon Smith Barney Inc. in
Atlanta. ``Supplies are building up, and consumers have no
incentive to buy metal.''
Copper for December delivery fell as much as 0.8 cent, or 1.3
percent, to 62.4 cents a pound on the Comex division of the New
York Mercantile Exchange, the lowest price since June 7, 1999.
Copper futures have fallen 2.6 percent this week and are down 28
percent from this time last year. They have been trading at or
close to a two-year low since mid-June.
In London, copper for delivery in three months fell as much
as $17, or 1.2 percent, to $1,377 a metric ton (62.46 cents a
pound) on the London Metals Exchange. It was the lowest price
since May 28, 1999.
An index of business confidence in western Germany compiled
by the Munich-based Ifo research institute fell to 85.0 in
September from 89.5 in August. It was the biggest decline since
November 1973. Germany was the third-biggest user of copper last
year, after the U.S. and China, according to Merrill Lynch & Co.
in New York.
Supply Gain
Copper inventories in warehouses monitored by the LME have
soared this year as demand weakened. They reached an 18-month high
of 748,100 tons on Oct. 10.
Prices of industrial raw materials including copper will fall
7.5 percent this year, ``as the global economy is experiencing its
most severe deceleration since the 1974 oil price shock,'' the
Economist Intelligence Unit said in a report yesterday.
Prices are likely to rebound 3.7 percent next year and will
``gain momentum'' in 2003, the London-based research firm said.
--Bradley Keoun in the New York newsroom (212) 318-2310 or at
bkeoun@bloomberg.net/jb |
