Copper Set for Longest Losing Streak Since '08
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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