Thursday, 09 Sep 2010
Copper dropped for a second day after an unexpected decline in German factory orders signaled growth may be slowing in Europe’s biggest economy.

The three month delivery contract on the London Metal Exchange fell as much as 0.8% to USD 7,569 per tonne and traded at USD 7,594.50 per tonne at 10:19 AM in Singapore. Copper for December delivery on the Shanghai Futures Exchange lost as much as 0.6% to CNY 59,320 per tonne (USD 8,726) before trading at CNY 59,520 per tonne.

Mr Zhang Xi, an analyst at Luzheng Futures Co, said from Shandong that “Uncertainties about the global macro economic environment never went away and the markets get a reminder every time economic data comes out worse than expected. Copper shouldn’t rally in August because it’s a traditionally slow demand period, but the entry of speculative money overrode the fundamentals. Prices tend to rise in September and October and now that the rally has been brought forward, gains will be limited from here.”

Factory orders in Germany, adjusted for seasonal swings and inflation, declined 2.2% in July from June. A separate report is expected to show that German exports stagnated in July indicating the country’s economy may be losing momentum. Economists expect the jobless rate in the US to approach 10% in the coming months, after private payrolls climbed less than expected in August.