Copper Falls Most in Five Weeks as China Services Measure Slumps

Jan 03, 2014 2:05 pm ET

Jan. 3 (Bloomberg) -- Copper fell the most in five weeks in New York after a gauge of Chinese service industries reached a four-month low and U.S. car sales trailed estimates in December, fanning concern that demand will weaken.

A services gauge from China’s statistics bureau and logistics federation dropped to 54.6 last month, after separate data released this week showed manufacturing expanded at a slower pace. Ford Motor Co. and Chrysler Group LLC said sales rose less than analysts estimated, while receipts at General Motor Co. and Toyota Motor Corp. slid. Tin fell to a four-month low on the London Metal Exchange.

“The selloff has been triggered by yet another soggy release out of China,” Edward Meir, an analyst at INTL FCStone in New York, wrote in a report today. “LME markets are down rather sharply across the board.”

Copper futures for delivery in March fell 0.8 percent to settle at $3.355 a pound at 1:10 p.m. on the Comex in New York, the biggest loss for a most-active contract since Nov. 27.

Data next week will show Chinese export growth weakened in December, economists surveyed by Bloomberg said. Cold weather may have kept buyers off of U.S. auto dealer lots at the end of the best sales year since 2007. China is the world’s biggest copper consumer, followed by the U.S.

Metals also declined after crude oil slid the most in almost 14 months in New York trading yesterday, Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail.

Orders to remove copper from LME warehouses dropped 2.7 percent, the most since August, to 235,100 tons.

On the LME, copper for delivery in three months fell 1.1 percent to $7,315 a ton ($3.32 a pound).

Tin fell as much as 3.5 percent in London to $21,300 a ton, the lowest since Sept. 3. Zinc, lead, nickel and aluminum also dropped.

--Editors: Thomas Galatola, Patrick McKiernan