Copper Falls Most Since Sept. 15 as U.S. Economic Growth Slows
By Dale Crofts
Sept. 28 (Bloomberg) -- Copper prices fell the most in more than a week on signs of a slowing economy in the U.S., the world's second-largest user of the metal.
The U.S. economy grew at an annual rate of 2.6 percent in the second quarter, less than previously estimated, as business spending, consumer demand and homebuilding slowed, the Commerce Department said today. The price of copper, used in wire and pipe, is down 15 percent since reaching a record high on May 11.
``There's some concern about today's low GDP numbers and the slowing housing market in the U.S.,'' said Donald Selkin, director of equity research at Joseph Stevens & Co. in New York. ``The macro factors are restraining any sustained uptrend in prices.''
Copper futures for December delivery were down 5.9 cents, or 1.7 percent, to $3.428 a pound on the Comex division of the New York Mercantile Exchange, the biggest decline for a most- active contract since Sept. 15. Prices are still up 96 percent from a year ago.
Home construction fell at an annual rate of 11.1 percent last quarter, the biggest decline since the second quarter of 1995, the Commerce Department's report showed. That compares with a 9.8 percent drop reported last month and a 0.3 percent decline the first three months of 2006. Housing accounts for 37 percent of U.S. copper demand, Citigroup estimates.
The gain in gross domestic product, the value of all goods and services produced in the country, compares with the Commerce Department's previous estimate of 2.9 percent, and 5.6 percent in the first quarter.
Reports this month suggest the housing slump is deepening as the supply of unsold homes swells. Sales of previously owned homes in the U.S. fell in August to the lowest since early 2004, and prices fell from year-ago levels for the first time since 1995, the National Association of Realtors said this week. Housing starts fell to a three-year low in August.
To contact the reporter on this story: Dale Crofts in Chicago at dcrofts@bloomberg.net .
Last Updated: September 28, 2006 14:01 EDT |
