Jan. 23 (Bloomberg) -- Copper declined by the most in more than two months after a manufacturing gauge unexpectedly contracted in China, the world’s biggest user of the metal.
A Purchasing Managers’ Index by HSBC Holdings Plc and Markit Economics showed a preliminary reading of 49.6 for this month, compared with the median estimate of 50.3 from analysts in a Bloomberg News survey. Levels below 50 signal contraction. Chinese markets will close from Jan. 31 to Feb. 6 for Lunar New Year holidays.
“We are seeing more concerted weakness in metals as weaker-than-expected PMI numbers out of China are weighing on the group,” Edward Meir, an analyst at INTL FCStone in New York, wrote in an e-mailed report today.
Copper futures for delivery in March dropped 1.5 percent to settle at $3.2855 a pound at 1:14 p.m. on the Comex in New York, the biggest loss since Nov. 13. Prices earlier reached $3.2765, the lowest for a most-active contract since Dec. 19.
China’s economic growth slowed in 2013’s final quarter and industrial output gained at the weakest pace in five months in December, data showed this week.
On the London Metal Exchange, copper for delivery in three months fell 1.2 percent to $7,206 a metric ton ($3.27 a pound).
Prices will fall below $6,500 this year, weighed by expanding supply, Julian Jessop, head of commodities research at Capital Economics Ltd. in London, said in a report today. Production will exceed usage by 385,000 tons in 2014, Goldman Sachs Group Inc. said Jan. 21.
Nickel, zinc, lead, tin and aluminum also declined on the LME.
--Editors: Joe Richter, Millie Munshi