Copper Set for Longest Losing Streak Since '08

By Bloomberg News –

Copper fell for a seventh day, the longest losing streak since December 2008, on worries that a failure to contain Europe’s sovereign-debt crisis may lead to a slump in demand. Lead, nickel and tin also dropped.

Three-month delivery copper on the London Metal Exchange fell as much as 2.3 percent to $7,170 a metric ton and traded at $7,184.75 at 1:26 p.m. Shanghai time. The contract tumbled to a 13-month low on Sept. 23 and lost 15 percent last week.

U.S. Treasury Secretary Timothy F. Geithner called on governments to unite with the European Central Bank to beef-up the capacity of their 440 billion-euro ($594 billion) bailout fund, warning failure to act threatened “cascading default, bank runs and catastrophic risk.”

“Copper is clearly in a downward trend, as investors see no improvement in the macro environment, only deterioration,”Zhang Zhenghua, an analyst at Minmetals Futures Co., said today by phone from Shanghai.

Commodities fell to a nine-month low on Sept. 23, with the Standard & Poor’s GSCI Index of 24 of energy, metal and agriculture prices declining 1.4 percent. The measure slumped 8.3 percent last week, the most in four months, and has tumbled 21 percent since touching a 32-month high in April.

The metal for November delivery on the Shanghai Futures Exchange fell 2.8 percent to 55,370 yuan ($8,671) a ton, sliding for a sixth consecutive day, after tumbling 14 percent last week.

Significant Risk

Copper has the most significant “fundamental” risk of declining out of the industrial metals because prices are well above the marginal cost of production, Macquarie Group Ltd. said in a report today.

Speculators were their most bearish on copper since July 2009, as managed-money funds held net-short positions in copper, or wagers on falling prices, totaling 6,672 futures and options contracts as of Sept. 20, data from the U.S. Commodity Futures Trading Commission compiled by Bloomberg showed. The measure showed net-long positions a week earlier of 300 futures and options contracts, betting on higher prices.

Aluminum fell 0.5 percent to $2,195 a ton, and zinc dropped 1.7 percent to 1,879 a ton. Lead fell as much as 7.9 percent to 1,800 a ton, the lowest since July 2010. Nickel declined 3.4 percent to $17,650 a ton, and tin retreated 5.9 percent to $19,005 a ton.

Sep 26, 2011

METALS-Copper gains, EU finance ministers' meeting eyed 

 LONDON, Sept 16 (Reuters) - Copper rose on Friday, building on strength
gained from the previous session after a funding plan for banks allayed fears
over Europe's festering debt crisis, but the region's financial problems were
expected to keep weighing on prices. 	

  Three-month copper on the London Metal Exchange (LME) traded at
$8,810 a tonne in LME rings from $8,711 a tonne at the close on Thursday.	

  "The improvement in market sentiment stems from the actions taken ... in
providing dollar liquidity to European banks," Natixis analyst Nic Brown said.	

  Major central banks around the world will cooperate to offer three-month
U.S. dollar loans to commercial banks to keep money markets from freezing up in
the wake of Europe's sovereign debt crisis. 	

  The European Central Bank said on Thursday it would hold three fixed-rate
operations between October and December to provide banks with as many dollars as
they needed, in order to ease any funding crunch over the year-end. 	

 But the plan is likely to offer only short-term relief to the metals
markets, as investors remain sceptical of any speedy resolution to the crisis. 	

 "Yes it's good that short term liquidity has been provided which will help
... but ultimately the question is all about long term fiscal sustainability,
and we are miles away from that yet," Brown said.	

  "It's clear that any kind of negative outcome in Europe could be very
dangerous indeed. That is clearly where the risks lie at the minute for the
global economy as a whole. We are not out of the woods yet."	

  U.S. Treasury Secretary Timothy Geithner told EU finance ministers on
Friday they should end loose talk about a euro zone break-up and work more
closely with the European Central Bank to tackle the debt crisis. 	

 Speaking after discussing with ministers the possibility of leveraging the
euro zone's bailout fund to give it more clout to tackle the region's debt
problems, Geithner said Europe would not see similar global financial
coordination as there was in 2009, but that Washington would do what it could to
help.
Fri Sep 16, 2011 8:31am EDT

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