Copper, nickel, zinc and tin tumbled, extending a multi-week slump, on concern that demand for raw materials may slow as European nations slash budgets to curb deficits. Aluminum also dropped.
Three-month delivery copper on the London Metal Exchange fell as much as 2.5 percent to $6,751 a metric ton, the lowest price in more than a week, and traded at $6,770 by 11:06 a.m. in Shanghai. Aluminum in London dropped 2.2 percent to $2,055.50 a ton after gaining last week.
The Reuters/Jefferies CRB Index of 19 commodities tumbled the most in nine weeks on May 14 as the euro fell to an 18- month low on concern that planned spending cuts by indebted nations may slow Europe’s recovery. The region’s currency risks breaking up under the strain of the debt crisis, Former Federal Reserve Chairman Paul Volker said May 13.
“Metals prices may continue to push lower if the European situation deteriorates,” Jia Zheng, an analyst at Southwest Futures Co., said from Shanghai.
Copper for August delivery in Shanghai slumped the daily 5 percent limit from the previous settlement price to 53,590 yuan ($7,848) a ton, the lowest level since Feb. 9. Shanghai aluminum fell 3.4 percent to 15,285 yuan, the lowest level since Nov. 16, 2009 and zinc tumbled the 5 percent limit to 16,125 yuan, the lowest since Oct. 21, 2009.
The dollar index added 1.1 percent against six major counterparts to 86.995, the highest level since March 18, 2009. The index has climbed for four straight weeks as investors seek a refuge on euro-zone concerns.
“Copper may bottom out at $6,000 within this month,” Li Jingyuan, a trading manager at Haitong Futures Co. said from Shanghai.
Zinc decreased 2.2 percent in London to $2,010 a ton and lead declined 1.8 percent to $1,905, nickel fell 1.7 percent to $21,200 a ton and tin lost 1.7 percent to $17,250 a ton.
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