Copper Declines After German Factory Orders Signal Growth May Be Slowing

Copper dropped for a second day after an unexpected decline in German factory orders signaled growth may be slowing in Europe’s biggest economy.

The three-month delivery contract on the London Metal Exchange fell as much as 0.8 percent to $7,569 a metric ton and traded at $7,594.50 at 10:19 a.m. in Singapore. Copper for December delivery on the Shanghai Futures Exchange lost as much as 0.6 percent to 59,320 yuan （$8,726） a ton, before trading at 59,520 yuan.

“Uncertainties about the global macro-economic environment never went away and the markets get a reminder every time economic data comes out worse than expected,” Zhang Xi, an analyst at Luzheng Futures Co., said from Shandong today.

“Copper shouldn’t rally in August because it’s a traditionally slow demand period, but the entry of speculative money overrode the fundamentals,” said Zhang. “Prices tend to rise in September and October and now that the rally has been brought forward, gains will be limited from here.”

Factory orders in Germany, adjusted for seasonal swings and inflation, declined 2.2 percent in July from June, the Economy Ministry said yesterday, compared with a 0.6 percent gain forecast by economists.

A separate report today is expected to show that German exports stagnated in July, according to a Bloomberg News survey, indicating the country’s economy may be losing momentum.

Economists expect the jobless rate in the U.S. to approach 10 percent in the coming months, after private payrolls climbed less-than-expected in August. The Federal Reserve releases its Beige Book business survey today, which may add to evidence the recovery is stalling.

Aluminum in London fell 0.3 percent to $2,158 a ton, zinc dropped 0.6 percent to $2,175 a ton and lead decreased 1.1 percent to $2,161 a ton. Nickel declined 0.9 percent to $22,001 a ton and tin hadn’t traded as of 10:24 a.m. in Singapore.