Industrial Metals Drop as Iraq, Ukraine Turmoil Threaten Economy

Aug 08, 2014 2:33 pm ET

Aug. 8 (Bloomberg) -- Industrial metals from zinc to lead fell in London as unrest in the Middle East and Ukraine threatens to damp demand and economic growth.

American warplanes struck against militants from Islamic State in Iraq, pulling the U.S. back into a conflict three years after its last combat troops left. Yesterday, European Central Bank President Mario Draghi said risks to the euro area’s economic recovery are increasing because of conflicts such as the Ukraine crisis. The Bloomberg Commodity Industrial Metals Index fell as much as 0.9 percent.

“We’re already seeing a lot of negative economic reports out of Germany because of the situation in Ukraine,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “The situation could definitely put a damper on demand.”

Zinc for delivery in three months dropped 1.5 percent to settle at $2,295 a metric ton at 5:50 p.m. on the London Metal Exchange. Lead fell 1.1 percent to $2,240 a ton. Nickel, copper and aluminum declined, while tin was unchanged.

On the Comex in New York, copper futures for September delivery fell 0.1 percent to $3.1735 a pound.