Copper prices tumbled the most in four months on concern that demand will wane in China and on signs a strike may be ending at a mine that is the world’s fourth-largest source of the metal.
The Thomson Reuters/Jefferies CRB Index of 19 commodities plunged as much as 3.1 percent on bets that China will curb growth to rein in inflation. The nation is the world’s biggest metals buyer. Workers at Chile’s Collahuasi mine indicated for the first time that they may make concessions to end a 12-day walkout.
“There is broad-based selling in the market because of China,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. “Also, this news about the strike coming to an end is pushing prices further down.”
Copper futures for March delivery dropped 19.35 cents, or 4.9 percent, to settle at $3.731 a pound at 1:20 p.m. on the Comex in New York. That’s the biggest drop since June 29.
China’s Premier Wen Jiabao said today that the cabinet is drafting measures to counter the fastest inflation in two years.
“The potential for Chinese monetary-policy tightening continued to weigh on investors.” Alex Heath, the head of industrial-metals trading at Royal Bank of Canada Europe Ltd. in London, said in a report.
Copper has rallied fivefold since 2002 as growth in emerging markets boosted demand for the metal used in buildings and electric grids.
Strike May End
Workers at Anglo American Plc and Xstrata Plc’s mine in Chile will accept government-mediated talks, a union leader said yesterday in an interview.
Prices also fell as the dollar strengthened, curbing the appeal of commodities as alternative investments, said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago.
On the London Metal Exchange, copper for delivery in three months declined $495, or 5.7 percent, to $8,150 a metric ton （$3.70 a pound）. Aluminum, lead, zinc, nickel and tin also dropped in London.
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