Copper fell for an eighth session in London, the longest slump since December 1998, on concern that slowing economic growth will curb demand in China, the world’s largest user of the metal.
Chinese factory output, as measured by a gauge the government will release tomorrow, probably slowed in January for a second straight month, according to analyst estimates. A private measure on Jan. 30 showed manufacturing contracted this month. Copper analysts are the most bearish in a year and expect prices to drop next week as markets in China shut for the Lunar New Year holiday, a Bloomberg News survey showed.
Copper dropped 4 percent this month after rising in the last two quarters of 2013, as signs of slowing economic expansion in China rekindle demand concerns. Global production will outstrip use by 167,000 metric tons this year, following a deficit of 137,000 tons in 2013, Barclays Plc has said.
“The reason that copper was going up earlier this year was that people thought China would need to restock a lot of their commodity reserves,” Fain Shaffer, president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “Now, it seems that might not be the case. It’s a combination of the potential weakening demand in China and emerging markets and that’s bringing prices down.”
Copper for delivery in three months lost 0.4 percent to settle at $7,065 a ton ($3.20 a pound) at 5:50 p.m. on the London Metal Exchange. This month’s decline was the biggest since June.
In New York, copper futures for March delivery fell 0.9 percent to $3.197 a pound on the Comex. Markets in China shut for a week starting today for the New Year celebration. Most markets in Asia are closed today.
Orders to remove copper from warehouses monitored by the LME slid 23 percent this month, the most since February.
The LME Index of the six main metals traded on the exchange, updated daily based on closing prices, fell 3.7 percent this month, the worst start to a year since 2010.
Aluminum and zinc were also lower in London, while nickel advanced. Lead and tin were unchanged.
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