BLBG: Copper, Zinc, Aluminum Drop Limit for Second Day in Shanghai
By Glenys Sim
Oct. 7 (Bloomberg) -- Copper, zinc and aluminum slumped by the exchange-imposed daily limit for a second day in Shanghai on concern the deepening credit crisis will weigh on global growth and reduce demand for raw materials.
Copper fell to a 2 1/2-year low today in Shanghai, while zinc plummeted to its lowest since trading began last year as stocks and commodities around the world plunged. A seizure in credit markets has led central banks worldwide to inject billions of dollars into the financial system.
``It's not looking good at all,'' Li Rong, chief analyst at Great Wall Futures Co., said from Shanghai today. ``Investor confidence has been badly shaken and people are just scrambling to exit, so the markets in the next few days will continue to move to the downside.''
The metal for December delivery on the Shanghai Futures Exchange dropped by 2,570 yuan, or 5 percent, from the previous settlement price, to 48,640 yuan ($7,111) a ton when the exchange opened for trading at 9 a.m. local time. This is down 42 percent from its record, and the lowest for a most-active contract since March 2006.
Copper in London tumbled as much as 9.1 percent yesterday, before closing 7.5 percent lower, and futures in New York slumped as much as 13 percent on recession concerns and as the dollar climbed to a 14-month high against the euro.
Three-month delivery copper fell 0.6 percent to $5,525 a ton on the London Metal Exchange at 11:04 a.m. in Singapore. The metal, used in pipes and wires, has declined 38 percent from its $8,940 record July 2.
December-delivery copper on the Comex division of the New York Mercantile Exchange fell 0.1 percent to $2.49 a pound at the same time, extending yesterday's drop to a 20-month low.
Zinc for December delivery in Shanghai tumbled its 6 percent limit 12,845 yuan a ton, the lowest for a most-active contract since futures started trading at the end of March 2007. Shanghai aluminum for December delivery also slumped by its 5 percent limit to 14,155 yuan a ton.
``Chinese metals consumption growth will be slower for at least the rest of the year,'' Barclays Capital analysts led by Gayle Berry wrote in a monthly report. ``This weaker consumption will counter underperforming supply for many of the base metals, resulting in a weaker pricing environment with most markets moving into surplus for the remainder of 2008.''
Among other LME-traded metals, aluminum was little changed at $2,258.50 a ton, and zinc fell 0.7 percent to $1,538 at 11:14 a.m. in Singapore.
To contact the reporter for this story: Glenys Sim in Singapore at email@example.com