Aug. 5 (Bloomberg) -- Copper capped the biggest decline in eight weeks in New York as a strengthening dollar reduced the appeal of industrial metals as alternative investments.
The Bloomberg Dollar Spot Index touched the highest in more than five months as service industries in the U.S. expanded in July at the fastest pace since December 2005. The Bloomberg Commodity Industrial Metals Index fell for the third time in four days, after posting four straight monthly gains through July on signs of improvements in U.S. manufacturing demand.
“A stronger dollar is going to have an impact across the board on demand for products in America,” Peter Thomas, a senior vice president at Zaner Group in Chicago, said in a telephone interview. “As to how long that impact will last, we don’t know. Global demand for copper has been good.”
Copper futures for delivery in September fell 1.2 percent to settle at $3.2045 a pound at 1:14 p.m. on the Comex in New York, the biggest decline since June 6. The metal gained 6.8 percent from the end of March through July.
On the London Metal Exchange, copper for delivery in three months slipped 1.1 percent to $7,055 a metric ton ($3.20 a pound).
In China, the world’s largest user of industrial metals, the services Purchasing Managers’ Index declined to 50.0 in July, the dividing line between expansion and contraction, from 53.1 in June, HSBC Holdings Plc and Markit Economics said today.
Car sales in Russia are poised to slump as much as 12 percent this year, Sergey Litvinenko, a senior manager at PricewaterhouseCoopers, said in a presentation in Moscow today.
A typical U.S.-built automobile contains more than 50 pounds of copper, according to the New York-based Copper Development Association Inc.
Lead, used mostly in batteries, fell 1.8 percent in London, the biggest loss since June 12.
Aluminum, nickel and zinc also declined on the LME, while tin rose.
--With assistance from Agnieszka Troszkiewicz in London, Ekaterina Shatalova in Moscow and Andrea Wong in New York.