Copper fell for a second straight session in New York as lower imports into China and an unexpected drop in U.S. home sales fueled concern that demand is weakening in the two biggest users of the metal.
Shipments of refined copper into China in March dropped 37 percent from a year earlier, customs figures showed today. Purchases of previously owned houses slid 0.6 percent to a 4.92 million annual rate last month, figures from the National Association of Realtors showed today. That trailed the 5 million rate projected in a Bloomberg survey of economists.
“China’s been the biggest buyer of raw materials for the past several years, so if they’re slowing, we’ll be in for a bumpy summer,” John Petrie, a senior market strategist at Zaner Group in Chicago, said in a telephone interview. “Commodities in general are in a difficult spot right now.”
Copper futures for delivery in July lost 0.6 percent to $3.1425 a pound at 11:32 a.m. on the Comex in New York. Last week, the price slumped 5.6 percent, entering a bear market.
The Chinese and U.S. data show demand may be weakening amid prospects for a larger market surplus. Copper stockpiles monitored by the London Metal Exchange have grown 92 percent this year.
Supply of the metal will exceed demand by 341,000 metric tons this year, more than last year’s 238,000 tons, and the market will be in surplus through 2017, said Citigroup Inc.
Caterpillar Inc. (CAT:US), the largest maker of mining equipment, posted disappointing first-quarter earnings, cut its 2013 forecast and lowered “significantly” its outlook for demand from commodities producers.
On the LME, copper for delivery in three months fell 1 percent to $6,891.50 a ton ($3.14 a pound).
Aluminum, tin, lead and zinc also dropped in London, while nickel was higher.
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