By Joe Richter
Copper futures fell for the third straight day as the U.S. dollar climbed and a decline in Germany’s factory orders fuelled concerns that Europe’s debt crisis will erode metal demand.
The greenback climbed as much as 0.5% against a basket of major currencies, diminishing demand for the metal as an alternative asset, after U.S. employers in December added more workers to payrolls than forecast by analysts. German factory orders in November posted the biggest decline in almost three years.
“The dollar is putting some pressure to the downside, and the market still has an eye toward Europe, because if that unravels, it will take copper demand with it,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.
Copper futures for March delivery fell 0.6% to US$3.4045 a pound by 10:25 a.m. on the Comex in New York. The price dropped 2.9% in the previous two days.
The gains in U.S. jobs may support demand eventually for raw materials such as copper, said Walter de Wet, the head of commodities research at Standard Bank PLC in London.
“We do see a slightly stronger dollar on the back of the news, which to some extent is putting downward pressure on commodities for now,” Mr. de Wet said. “The U.S. economy is performing probably better than most people expected, which overall should be good for industrial commodities.”
On the London Metal Exchange (LME), copper for delivery in three months dropped 0.5% to US$7,499.75 a metric ton (US$3.40 a pound).
Lead, nickel and tin also dropped on the LME. Aluminum and zinc gained.
Editors’ Briefing: This Week in Political Economy (December 2-9).
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