By Anna Stablum
April 27 (Bloomberg) -- Copper fell in London on concern an outbreak of swine flu may hurt efforts to revive the world economy. Aluminum, nickel and zinc also declined.
The MSCI World Index of stocks dropped for the first time in five days as the U.S. declared swine flu a public health emergency. Mexico’s toll of flu-related deaths exceeded 100.
“These pandemics, even just the risk of it, tends to shut economic activity down,” John Meyer, research chief at Fairfax IS in London, said by phone. “It’s going to slow things down.”
Copper for delivery in three months fell $185, or 4.1 percent, to $4,285 a metric ton by 12:44 p.m. in London, extending last week’s 7 percent drop.
The Dollar Index, a basket of six major currencies, rose for the first time in five days, making dollar-denominated commodities more expensive for those holding other currencies.
Metals “have come under pressure on the back of resurgent fears over economic growth, a stronger dollar and the emergence over the weekend of news that the outbreak of swine fever in Mexico has spread,” Leon Westgate, an analyst at Standard Bank Group Ltd. in London, said in a report.
Copper, used in plumbing and wiring, reached $4,925 a ton on April 14, the highest in almost six months, and is up 41 percent so far this year.
“Copper prices may have reached a top,” Credit Suisse Group AG said today in a note. China’s stockpiling agency “has already completed most of its purchases for 2009. Inventories are still at very high levels as real demand remains subdued.”
Copper Stockpiles
Stockpiles have risen 25 percent this year. Inventories monitored by the London Metal Exchange fell 1 percent to 425,275 tons, the bourse said.
Hedge-fund managers and other large speculators increased their net-short position, or bets prices will fall, in New York copper futures in the week ended April 21, according to U.S. Commodity Futures Trading Commission data released April 24.
Goldman Sachs Group Inc. said commodities will recover next year. “The global economy will bottom sometime in the second half of 2009, which would imply strong commodity returns to be realized in 2010 and 2011,” the bank said in a note yesterday.
Among other LME metals for three-month delivery, aluminum fell $23, or 1.6 percent, to $1,434 a ton. Stocks in LME- monitored warehouses rose 0.3 percent to a record 3.7 million tons, exchange data showed.
Total aluminum inventories shrank to 2.74 million tons in March, from 2.91 million tons in February, the International Aluminium Institute said in a report today.
Lead fell $73, or 5.1 percent, to $1,362 a ton, extending an 8 percent drop from last week.
Zinc retreated $55.25, or 3.9 percent, to $1,364.75 a ton, after dropping 9 percent last week. Tin eased 4 percent to $12,100 a ton and nickel fell $490, or 4.2 percent, to $11,060 a ton after dropping 10 percent last week.
To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net.
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