Copper Falls on Concern Slowing Economies May Cut Metals Demand
2005-04-18 11:24 (New York)
By Claudia Carpenter and Jennifer Itzenson
April 18 (Bloomberg) -- Copper prices in New York fell,
extending last week's 4.1 percent decline, amid speculation global
growth will slow, reducing demand for the metal used in
manufacturing and construction.
Global economies face increased risks, such as high energy
prices, finance ministers from the Group of Seven industrial
nations said April 16 after a two-day meeting. Crude oil rose today
on expectation for gains in gasoline demand as the peak U.S.
driving season approaches. Oil prices have increased 34 percent in
the past year.
``The G-7 confirmed a global GDP slowdown via higher oil
prices, which should have a direct impact on the most macro metal,
copper,'' said Michael Guido, director of hedge fund marketing and
commodity strategy in New York for Paris-based Societe Generale SA.
Copper futures for May delivery fell 1.5 cents, or 1 percent,
to $1.43 a pound at 11:22 a.m. on the Comex division of the New
York Mercantile Exchange. Last week's decline was the biggest drop
since Feb. 4. A futures contract is an obligation to buy or sell a
commodity at a set price by a specific date.
Copper prices rose 39 percent last year as gains in the
economies of China and the U.S. fueled demand that outpaced
supplies from mining companies.
The Empire State Manufacturing Survey, which indicates the
performance of U.S. industry, fell to the lowest since April 2003,
the Federal Reserve Bank of New York said on April 15. Consumer
sentiment as measured by the University of Michigan fell this month
to the lowest since September 2003, a separate report on April 15
showed.
Growth `Fears'
``There are some fears about the strength of global growth,''
said Tom Boustead, an analyst at Refco LLC in New York. Those
concerns are leading copper to ``retreat from a very high level,''
he said.
Climbing inventory heightened concern that slowing economic
growth will create a supply surplus. Global stockpiles monitored by
the London Metal Exchange today rose 225 tons, up 7.1 percent this
year.
Rising stockpiles are a ``short-term negative,'' said Edward
Meir, a Darien, Connecticut-based analyst at Man Financial Ltd.
On the London Metal Exchange, copper for delivery in three
months fell $22, or 0.7 percent, to $3,160 a metric ton. Prices
below $3,200 will encourage some traders who follow charts and
graphs to sell, Guido said.
On the Shanghai Futures Exchange, copper for delivery in June
gained 340 yuan, or 1.1 percent, to 32,390 yuan ($3,913 a ton).
Twelve of 19 traders, analysts and investors surveyed by
Bloomberg on April 15 said they expect copper prices to fall this
week. Seven predicted a gain.
--With reporting by Chanyaporn Chanjaroen in London. Editor:
McKiernan |
