Copper declined to its lowest price since late June on Thursday on anxiety over demand for the industrial metal after release of data showing euro zone economic growth stalled in the second quarter and the Chinese property sector slowed.
Germany’s economy shrank by 0.2% over the quarter, below Bundesbank projections. France was a little better, remaining little changed for the second quarter in a row. A quick recovery is not probable, considering uncertainty over Russia and Ukraine, Reuters said.
Copper for three-month settlement dropped as much as $6,821 per tonne on the London Metal Exchange, its weakest since June 23.
“When you have contracting GDP data for the biggest economy of the euro zone, Germany, you will see more bearish bets than bullish. Today’s GDP numbers for France and for Germany are a big dent for economic growth in the euro region,” Reuters quoted Naeem Aslam of Ava Trade in Dublin as saying.
Euro zone manufacturing also declined unexpectedly in June.
However, Aslam said the unimpressive gross domestic product data fueled possibility of more economic support from major central banks to bolster growth, which would propel demand for industrial metals.
Goldman Sachs said it was reaffirming its three-month and six-month price outlook unaltered at $6,600 per tonne, for the most part because of expectations that Chinese imports will drop.
China is enhancing its smelting capacity and this will reduce its dependency on imported processed copper by around 40,000 tonnes per month, hiking global stockpiles of refined copper, Goldman Sachs said.
According to Bloomberg, copper futures for December delivery sank 0.6% to trade at $3.1125 per pound as of 1:16 pm on the Comex in New York. The price reached $3.1065 earlier, the lowest for a most-active contract since June 23.
Other losers for the day include lead, aluminum and zinc. Nickel and tin climbed.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com