Copper dropped, snapping a rebound from a three-month low, and aluminum and zinc also fell on concern Europe’s debt crisis may worsen, reducing demand for raw materials.
Three-month delivery copper on the London Metal Exchange slumped as much as 3.4 percent to $6,470 a metric ton and traded at $6,555 at 2:37 p.m. in Shanghai. Aluminum fell 2.1 percent to $2,010 per ton and zinc lost 2.7 percent to $1,889 per ton. Lead, nickel and tin also declined.
"There may be short-lived rebounds now and then for some metals, but the big downtrend is not over yet against the macro backdrop,” Zhu Mingyuan, an analyst at Xiangyu Futures Co., said from Shanghai. “Traders may rush to sell their stocks at any rebound as their confidence is shaken.”
U.S. equities tumbled yesterday and Chinese shares fell today after Germany’s move to ban some speculative investments sparked concern that Europe’s debt crisis is worsening. The euro slid to its weakest since April 2006 today and the dollar extended its gains as traders sought an investment refuge.
The Reuters/Jefferies CRB Index of 19 commodities dropped to a seven-month low yesterday on speculation European efforts to curb government debt will erode economic growth and China may step up measures to reduce asset bubbles.
Copper for August delivery in Shanghai slumped as much as 3.6 percent to 51,820 yuan ($7,590) a ton and closed at 53,130 yuan. Zinc dropped as much as 5.5 percent to 14,830 yuan.
Lead in London slumped 1.9 percent to $1,800 a ton, tin fell 1.4 percent to $17,250 a ton and nickel lost 3.4 percent to $21,400 per ton.
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