COMMODITIESJUNE 3, 2010, 12:30 P.M. ET
Copper Hits 2-Week Low
By ALLEN SYKORA
Copper futures fell to their lowest levels in two weeks as investors worried about the strength of the global economy and China's efforts to cool its real-estate sector.
In late morning in New York, copper for July delivery fell 8.15 cents, or 2.7%, to $2.9590 per pound on the Comex division of the New York Mercantile Exchange.
"There seems to be a lot of talk about China slowing down," said Frank Lesh, broker and futures analyst with FuturePath Trading in Chicago.
Zuma Press
New copper cables pictured on the trolly of technicians of Deutsche Bahn at the tracks near Fuerstenwalde, Germany.
Chinese authorities have acted repeatedly this year to cool the economy and the real-estate sector in particular. Also, the Purchasing Managers Index for China's manufacturing sector fell earlier this week. The country is the world's largest consumer of copper.
Early in the day, some investors expected copper to rise, given that equities opened higher after rallying Wednesday. Gains in stocks are seen as a sign of economic optimism; faster growth would lead to more demand for copper.
Instead, stocks backed down from their early highs. The euro, bogged down recently by worries that sovereign-debt problems in some European nations would derail economic growth, began slipping again.
"We had a pretty nice rally in the stock market yesterday, but that is fading today a little bit," said Brian Hicks, co-manager of U.S. Global Investors' Global Resources Fund, based in San Antonio, Texas.
"So perhaps we're seeing people get a little more concerned about the broader equity markets and global growth and specifically growth in China. It's more of the same themes we've seen over the last month or so when we've had copper come down from around $3.60 to below $3 now."
The copper price remained below its 20-day moving average, falling below the level of $2.95 to $2.97 where some observers had expected prides would find support. The benchmark futures contract fell as low as $2.93, the weakest level since May 20.