July 1 (Bloomberg) -- Copper in London dropped for the first time in four days as manufacturing in China, the world’s largest user, shrank to the lowest level since February 2009.
Three-month copper on the London Metal Exchange lost as much as 0.9 percent to $9,345 a metric ton, and traded at $9,412.25 by 4:43 p.m. Singapore time. Commodities including oil and corn declined as supplies grew and the dollar rebounded, sending all six LME metals lower.
“The volatility will continue for a while as economic data is uneven,” Huang Shiquan, an analyst at Changjiang Futures Co., said from Hubei. “The manufacturing data in China doesn’t bode well, although on the bright side, this may reduce the possibility of further tightening measures.”
China’s Purchasing Managers’ Index was at 50.9 in June compared with 52 in May, the lowest level since February 2009, a report showed today. Economists in a Bloomberg News survey were expecting 51.5. Copper prices were barely changed in the three months to June on concern China’s fight against inflation will damp growth in the world’s largest metals user.
Copper on the Comex in New York shed as much as 0.8 percent to $4.2485 a pound, while metal for September delivery on the Shanghai Futures Exchange ended little changed at 69,880 yuan ($10,808) a ton, after losing as much as 0.5 percent earlier.
Copper prices in China yesterday moved into a so-called contango, where spot supplies are less expensive than longer- dated contracts, a sign of plentiful supplies or lower near-term demand. They had been in the reverse since April. Prices in Changjiang, Shanghai’s biggest cash market, traded around 69,825 yuan a ton today.
The dollar rose for the first time this week against a six- currency basket including the euro, as U.S. manufacturing unexpectedly grew at a faster pace in June and before a report that economists say may show U.S. consumer confidence improved.
Copper is still 4 percent higher this week, the most in 12 weeks, after Greece passed austerity measures needed to secure financial aid, easing concern of a default that may destabilize the banking system.
The metal reached $9,430.15 a ton yesterday, the highest since April 28, as an index of pending home resales in the U.S. increased 8.2 percent from April, after a revised 11 percent drop the prior month and compared with the 3 percent gain economists’ were expecting.
Deutsche Bank AG and Allianz SE, Germany’s biggest bank and insurer, were among the nation’s financial firms that agreed to reinvest in Greek debt to help avoid the euro area’s first default. The region’s finance ministers meet in Brussels on July 3 to decide whether Greece has met the conditions for its next aid payment.
Zinc in London declined 0.9 percent to $2,342.75 a ton, lead dropped 0.9 percent to $2,660 a ton and nickel slid 0.3 percent to $23,350 a ton. Tin fell 0.2 percent to $25,905 a ton, while aluminum was little changed at $2,534.50 a ton.
--Editors: Thomas Kutty Abraham, Richard Dobson
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