--Comex July copper settles down 4.05 cents, or 1.3%, at $3.185
a pound
--Asian stock-market declines undercut initial gains as China
returns from holiday
By Matt Day
NEW YORK--Copper futures slumped to a six-week low Thursday, as
a selloff in Asian equities markets bolstered worries about demand
from the key copper-consuming region.
The most actively traded copper contract, for July delivery,
fell 4.05 cents, or 1.3%, to settle at $3.185 a pound on the Comex
division of the New York Mercantile Exchange, the lowest settlement
since May 2.
Copper's decline was the fifth in six sessions, with futures
sliding 5.5% in that span. Recent readings on industrial activity
and exports in China, the top copper consumer, have
disappointed.
Chinese demand "appears insufficient" to drive prices higher,
said David Wilson, an analyst and director of research with
Citigroup. Mr. Wilson said data on key copper-consuming sectors
there, such as power cable production and housing starts, suggest
sluggish demand.
Like some other growth-sensitive assets, copper also has been
pressured by worries about growth in emerging markets broadly, and
the view that the Federal Reserve may pull back on its stimulus
program. Copper is used in a wide range of industrial products,
making prices sensitive to shifts in economic sentiment.
The World Bank late Wednesday downgraded its outlook for global
growth, predicting expansion of 2.2% this year, slightly lower than
last year's growth rate and down from the bank's 2.4% forecast in
January.
With Chinese traders out earlier this week for a holiday, copper
futures ticked higher Wednesday, partly in anticipation that their
return Thursday would bring increased demand. Those expectations
didn't come to pass, traders and analysts said.
"The Chinese have made a fairly low-key return" to metals
markets, Standard Bank analyst Leon Westgate said in a note. An
initial flurry of buying in Asian trading hours quickly petered out
as regional equities markets tumbled, Mr. Westgate said.
The Nikkei Stock Average slumped more than 6% Thursday, pushing
shares into bear-market territory on investor unease at the
direction of Fed monetary policy and cooling growth in emerging
markets. The Shanghai Composite Index fell 2.8%.
Copper's losing streak has come despite some mine disruptions
expected to limit global copper output.
Freeport-McMoRan Copper & Gold Inc. (FCX) invoked contract
terms Wednesday that allowed it to suspend shipments from its
massive Grasberg mine in Indonesia following two deadly accidents
there. Activity at Rio Tinto PLC's (RIO) Bingham Canyon mine in
Utah has been suspended since April after a landslide.
Write to Matt Day at matt.day@dowjones.com
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