Copper futures headed for the biggest drop in almost two weeks on signs that demand may ebb this year in China, the wold’s biggest consumer of industrial metals.
China is targeting a gain in exports of about 7.5% in 2014, three people with direct knowledge of the matter said, below last year’s increase of 7.9%. Passenger-vehicle sales in the country rose less than analysts estimated last month, adding to signs that the economy is slowing. Copper dropped for the third time in four days.
“Slower exports from China could be a sign of weaker global demand,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Slower shipments would hurt copper and other raw materials.”
Copper futures for March delivery(COMEX:HGH14) declined 0.8% to $3.229 a pound by 10:26 a.m. on the Comex in New York. A close at that price would mark the biggest drop for a most-active contract since Jan. 31.
Yesterday, futures rose 1.3%, the most in a month, after Chinese trade figures exceeded estimates and data showed imports of unwrought copper and copper products into the nation surged to a record in January.
Today’s decline in prices “suggests that the spike in January metal imports is being perceived more as a ‘financing play’ as opposed to a ‘consumption play’,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report. Yesterday’s trade data “has done little, if anything, to dispel lingering concern about China’s short-term macro outlook.”
On the London Metal Exchange, copper for delivery in three months fell 0.8% to $7,098.50 a metric ton ($3.22 a pound).
Aluminum, nickel zinc and lead slid in London, as tin rose.
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