Copper Trades Little Changed After Tumbling on Economic Woes

By Glenys Sim

Nov. 18 (Bloomberg) -- Copper traded little changed in Asia after falling the most in nearly a week yesterday on concern the global economic slowdown is deepening.

Copper prices dropped yesterday after manufacturing in New York contracted the most since 2001 and Citigroup Inc. said it will cut 52,000 jobs. U.S. markets will likely remain strained for “months” to come, Treasury Secretary Henry Paulson said.

“Worries about the international economic outlook have continued to dominate base metals trading,” David Moore, commodity strategist at Commonwealth Bank of Australia, wrote in an e-mail. Prices remain “under downward pressure,” he said.

Copper for delivery in three months on the London Metal Exchange fell as much as 5.8 percent yesterday, and traded little changed at $3,665 a metric ton at 10:45 a.m. in Singapore.

March-delivery copper on the Comex division of the New York Mercantile Exchange lost 1 percent to $1.65 a pound after falling 2.8 percent yesterday.

Inventories monitored by the London Metal Exchange climbed 0.7 percent to 275,900 tons yesterday, their 19th straight gain and the highest since March 2004.

Copper for January delivery on the Shanghai Futures Exchange dropped as much as 1.6 percent to 28,880 yuan ($4,230) a ton, and stood at 29,140 yuan at 10:45 a.m. local time.

Production Cuts

Copper’s losses were limited by speculation that China’s Copper Smelters Purchase Team, which represents the country’s biggest producers, may jointly cut production.

Tongling Nonferrous Metals Group Co., China’s biggest copper smelter, Yunnan Copper Industry Co. and smaller rivals cut output in September amid falling copper prices. Jiangxi Copper Co., China’s second-biggest smelter of the metal, said Oct. 23 it is taking measures to ensure production won’t be disrupted.

“Joint production cuts in reality are very difficult to achieve as each smelter has their own output plans,” Jia Zheng, an analyst at Southwest Futures Co. said from Shanghai. “The zinc and aluminum producers tried to do it earlier this year, and we’re not seeing any results from their meeting.”

Among other LME-traded metals, aluminum was almost unchanged at $1,894 a ton, and zinc was unchanged at $1,170. Lead, nickel and tin had not traded.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net