Bloomberg News

Copper Declines on Concern Global Stimulus Won’t Revive Growth

September 26, 2012

Copper dropped on concern that stimulus measures announced by central banks from the U.S. to Japan, won’t be enough to bolster global economic growth, curbing demand prospects for industrial metals.

Copper for delivery in three months lost as much as 1.1 percent to $8,185 a metric ton on the London Metal Exchange and traded at $8,200 at 4:15 p.m. in Tokyo. The metal is up 7.7 percent this month, the most since January. December-delivery metal lost 0.6 percent to $3.7375 a pound on the Comex.

Federal Reserve Bank of Philadelphia President Charles Plosser said yesterday that more bond purchases by the U.S. central bank probably won’t boost growth. Japan’s biggest manufacturers grew more pessimistic this quarter as China’s slowdown and Europe’s debt crisis sapped exports, according to a Bloomberg survey ahead of a data release next week.

“I expect copper to trend lower in the next couple of weeks,” said Zhang Tianfeng, an analyst at Dongxing Futures Co. “There’s no improvement in the physical market.”

The Fed announced a third round of stimulus on Sept. 13, and the Bank of Japan said last week it will add to a fund that buys assets. Copper inventories at bonded warehouses in Shanghai have probably risen to a record 650,000 tons, according to a Bloomberg survey of traders, analysts and warehouse managers.

The Bank of Japan’s Tankan survey will show Oct. 1 that business confidence fell to -4, the fourth quarter pessimists outnumbered optimists, according to the median of 12 estimates in the survey. That would mark the longest string of negative readings since Japan emerged from the global recession in 2010.

January-delivery copper closed little changed at 59,150 yuan ($9,381) a ton on the Shanghai Futures Exchange, set for a quarterly advance. Financial markets in China, the biggest consumer, will be closed next week for the National Day holiday.

On the LME, aluminum, tin, zinc, nickel and lead declined.

To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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