Copper Declines Most in Four Weeks on China’s Manufacturing Data

Jun 03, 2014 3:18 pm ET

June 3 (Bloomberg) -- Copper futures fell the most in four weeks on signals that factory demand will ease in China, the world’s largest consumer of industrial metal.

A Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was 49.4 in May, compared with a median forecast of 49.7 in a Bloomberg News survey of analysts. Readings below 50 signal contraction. China faces a property slump that threatens economic growth. Copper has dropped 7.6 percent this year.

“Weakening Chinese data is going to have an impact on copper,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Less industrial expansion is going to impact prices negatively.”

Copper futures for July delivery fell 1.1 percent to settle at $3.137 a pound at 1:25 p.m. on the Comex in New York, the biggest decline for a most-active contract since April 30.

On the London Metal Exchange, copper for delivery in three months declined 0.9 percent to $6,868 a metric ton ($3.12 a pound).

Orders to remove the metal from warehouses monitored by the LME fell for the sixth straight session, to 70,975 tons. In Shanghai, copper traded at a discount of 1,977.6 yuan ($316) a ton to London prices, discouraging imports into China.

Yesterday, the dollar reached an eight-week high against a basket of major currencies, reducing the appeal of commodities as an alternative investment.

Nickel, tin and aluminum fell today in London, while lead and zinc gained.

--With assistance from Maria Kolesnikova and Agnieszka Troszkiewicz in London.