July 6 (Bloomberg) -- Copper dropped in London for the first time in seven days, snapping its longest winning run this year, as concern about Europe’s fiscal crisis resurfaced after Moody’s Investors Service downgraded Portugal’s debt.
Three-month copper on the London Metal Exchange lost as much as 0.5 percent to $9,493 a metric ton and traded at $9,509.25 by 10:53 a.m. Singapore time. The metal touched a 10- week high yesterday on speculation China is near the end of a monetary tightening cycle. Zinc and lead also declined before a report that economists say may show the U.S. unemployment rate held at 9.1 percent even as payrolls climbed.
“Europe’s debt crisis is a long-term problem which will weigh on investor sentiment as and when there’re new developments that show the situation is not good,” Mo Zhe, a trader at First Capital Futures Co., said from Beijing. “The next cue will come from the ECB meeting and U.S. payrolls.”
Moody’s cut Portugal’s credit rating yesterday to below investment grade on concern it will need to follow Greece in seeking a second international bailout. European finance minister will meet on July 11 to discuss a new rescue for Greece.
The European Central Bank will probably increase its main refinancing rate to 1.50 percent from 1.25 percent on July 7, according to all 55 economists in a Bloomberg News survey. The next day, a report will probably show U.S. payrolls climbed by 100,000 workers in June after a 54,000 increase in the previous month, while the jobless rate was unchanged.
Copper for September delivery on the Shanghai Futures Exchange rose as much as 0.9 percent to 70,990 yuan ($10,976) a ton, while aluminum gained as much as 1 percent to 17,465 yuan, the highest price since Feb. 22, 2010.
“During the current slow demand season, Chinese prices are led by international prices rather than the demand and supply situation,” said Mo.
Aluminum in London fell 0.2 percent to $2,570 a ton, zinc dropped 0.6 percent to $2,396 a ton, and lead declined 0.5 percent to $2,686 a ton. Nickel was unchanged at $23,300 a ton, while tin hadn’t traded.
--Editors: Ovais Subhani, Richard Dobson
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