Copper in London Declines on U.S. Growth Concern, China Commodity Selloff

By Bloomberg News - Sep 9

Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Copper declined on signs that U.S. economic growth may be slowing and on a selloff in Chinese commodities after a report that regulators may be investigating large futures positions in Shanghai. Zinc dropped 6.5 percent.

The red metal for three-month delivery dropped as much as 2.8 percent to $7,460 a metric ton on the London Metal Exchange, and traded at $7,515 at 11:22 a.m. in Shanghai.

The U.S. Federal Reserve said in a report overnight that the economy was showing “widespread signs of a deceleration”。 A survey by 12 Fed regional banks showed five reported conditions were mixed or decelerating, five said that there was “economic growth at a moderate pace,” and two pointed to “positive developments or net improvements.”

“The market is still affected by the bad news and data coming out from time to time, so it’s difficult for copper to gain further at this point,” Cao Yanghui, an analyst at Nanhua Futures Co., said by phone from Hangzhou.

Copper for December delivery in Shanghai tumbled as much as 4.4 percent to 57,170 （$8,424） yuan. It was at 58,440 yuan a ton by the 11:30 a.m. local time break. Zinc and aluminum fell by the daily 5 percent limit to 17,190 yuan and 15,000 yuan, respectively. Zinc last traded at 17,580 yuan and aluminum was at 15,540 yuan.

“There’s market talk today that a certain trader is being investigated by the securities regulator, leading to a large liquidation earlier,” Ying Haoliang, an analyst at Orient Securities Futures Co., said by phone from Shanghai.

Probe Talk

Commodity prices in China declined today on market rumors that regulators were investigating large positions in natural rubber futures, the Securities Times said on its website, citing people it didn’t identify. Rubber prices dropped in Shanghai and the declines spilled over into other commodities including copper, aluminum and zinc, it said. Rubber for January delivery dropped as much as 4.6 percent, the most since June 7, to 25,230 yuan a ton.

An official at the China Securities Regulatory Commission, who didn’t wish to be identified, declined to comment.

“The market will look at the production and trade data in the next couple of days to assess the economic condition,” Zhao Kai, an analyst at Jiurui Futures Co. said from Shenzhen. “We’ll also watch the consumption side in September.”

China’s customs department will release the August trade data tomorrow.

Zinc in London declined by the most since June 29 to $2,075.25 a ton and last traded at $2,138 a ton. Aluminum fell 1.4 percent to $2,130 a ton and lead slid 2.5 percent to $2,180 a ton. Nickel lost 2.6 percent to $22,300 a ton and tin dropped 1.1 percent to $21,430 a ton at 11:19 a.m. in Shanghai.