BLBG : Copper Slumps Most in Two Weeks After Holiday on China Equities
Sept. 1 (Bloomberg) -- Copper dropped the most in two weeks, tracking losses in New York and Shanghai after a plunge in Chinese stocks raised concern about weakening demand from the world’s largest metals consumer.
Copper fell as much as 3.6 percent, pacing a decline in industrial metals on the London Metal Exchange, as it resumed trading after a holiday. The Shanghai Composite Index slumped the most in 15 months yesterday and entered a bear market on concern slower lending growth may derail a rebound in the world’s third-largest economy.
“The LME is catching up with the losses we saw in New York and Shanghai yesterday,” Lin Yuhui, deputy general manager at Jinhui Futures Co., said today from Shenzhen. “The markets were overdue for a correction after such an extended rally and this is exacerbating the decline.”
Three-month copper on the London Metal Exchange fell as low as $6,240 a metric ton, before trading at $6,310 at 9:13 a.m. in Singapore. Still, the metal used in construction and automobiles has more than doubled this year, capping an eight straight month of gains in August, as China stockpiled supplies.
Copper for December delivery in New York was up 1.2 percent at $2.8650 a pound, after falling as much as 5.2 percent yesterday, the most since June 22. December-delivery copper on the Shanghai Futures Exchange fell 0.9 percent to 48,890 yuan ($7,157) after losing as much as 3.5 percent to 48,960 yuan a ton yesterday.
The Shanghai benchmark stock index tumbled 6.7 percent to 2,667.75 yesterday, capping its biggest monthly loss since October. The gauge has slumped 23 percent from its 15-month high on Aug. 4 and is the worst performer this month among 89 benchmark indexes tracked by Bloomberg globally.
The measure may fall another 25 percent as China’s economic recovery isn’t “sustainable,” former Morgan Stanley Asian economist Andy Xie, who correctly predicted in April 2007 that China’s equities would tumble, said in a Bloomberg Television interview.
Among other LME-traded metals, aluminum lost 1 percent to $1,881 a ton, zinc fell the most in over two weeks to $1,835 a ton, and lead slid 2.2 percent to $2,060 a ton. Nickel lost 1.4 percent to $18,760 a ton, while tin hadn’t traded as of 8:28 a.m. in Singapore.
