Copper futures declined for the second straight day on signs of slowing economic growth in China, the world’s biggest consumer of industrial metal.
Yesterday, the Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics showed a preliminary reading of 49.6 for May, below the level of 50 separating growth and contraction, driving copper down 2.3 percent, the most in three weeks. A day earlier, the metal rose on concern that a deadly accident at the second-biggest mine may crimp supplies.
“The weak Chinese numbers hung heavily over the metals group and seemed to be dwarfing concern about the legitimate supply bottlenecks that have cropped up in the copper complex the last few weeks,” Edward Meir, an analyst at INTL FCStone in New York, said in a report. “It remains to be seen if China will invest more in urbanization projects.”
Copper futures for July delivery fell 0.3 percent to settle at $3.2955 a pound at 1:12 p.m. on the Comex in New York. This week, the price declined 0.8 percent, the second straight drop.
Richard Adkerson, the chief executive officer of Freeport-McMoRan Copper & Gold Inc. (FCX:US), said yesterday that it’s too early to say how long an investigation will take into a tunnel collapse that killed 28 people at the Grasberg site in Indonesia. A month ago, Rio Tinto Group suspended mining at Bingham Canyon in Utah.
Vedanta Resources Plc, controlled by billionaire Anil Agarwal, said that its Konkola Copper Mines unit in Zambia plans to cut 24 percent of the workforce. BHP Billiton Ltd.’s Escondida site in Chile is the largest copper mine.
“Supply concerns continue to offer an element of support to the metal,” Cailey Barker, an analyst at Numis Securities Ltd. in London, said in a report.
On the London Metal Exchange, copper for delivery in three months dropped less than 0.1 percent to $7,299 a metric ton ($3.31 a pound). Aluminum, zinc, and nickel declined, while tin and lead gained.
On May 27, the LME will be closed and Comex floor trading will be shut for national holidays.
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