El cobre se va de cara
Copper Tumbles on Slowing Manufacturing, Europe Debt Concerns
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By Anna Stablum and Millie Munshi
May 17 (Bloomberg) -- Copper prices plunged the most since February 2009 on mounting signs the global economic recovery is slowing.
Manufacturing in the New York region expanded at a slower pace in May than forecast, a report from the Federal Reserve Bank of New York showed. The euro slid to its lowest level against the dollar since 2006 on concern that growth in the region will decline as Greece, Spain and Portugal struggle to close budget gaps. Copper prices have fallen for five weeks.
“The drop in copper is telling you the global economy is weak, and these sovereign-debt problems could sweep the planet,” said Michael Pento, the chief economist at Delta Global Advisors in Holmdel, New Jersey.
Copper futures for July delivery declined 18.6 cents, or 5.9 percent, to $2.948 a pound at 11:22 a.m. on the Comex in New York. A close at that price would mark the biggest drop for a most-active contract since Feb. 17, 2009. Earlier, the metal touched $2.94, the lowest level since Feb. 10.
Before today, the metal plunged 13 percent since April 9. The five weeks of declines marked the longest losing streak since October 2009. Futures also have declined as the stronger dollar reduced demand for commodities as alternative assets.
“We attribute most of the selling to a combination of concerns about risk appetite and a strong dollar,” Tobias Merath, Credit Suisse Group AG’s head of commodity research in Zurich, said by telephone. “The debt problems in Greece seem so remote from the copper market, but there is a direct link via banks.”
Reducing Credit
Money markets are showing rising levels of mistrust between Europe’s banks on concern that the bailout won’t prevent a sovereign-debt default that might trigger a breakup of the euro.
“If banks are de-risking, they are reducing credit lines,” Merath said. “If the credit line is smaller, you have to reduce trading activity.”
Copper for delivery in three months fell $371, or 5.4 percent, to $6,555 a metric ton ($2.97 a pound) on the London Metal Exchange. Aluminum, nickel, lead, tin and zinc prices also dropped.
To contact the reporter on the story: Anna Stablum in London at
astablum@bloomberg.net. Millie Munshi in New York at
mmunshi@bloomberg.net
Last Updated: May 17,