By Glenys Sim
June 23 (Bloomberg) -- Copper declined to the lowest in more than three weeks in Asia amid speculation that demand may decline after the dollar gained and the World Bank forecast a deeper global recession this year.
The World Bank said yesterday the global economy will contract 2.9 percent in 2009, more than its March forecast for a 1.7 percent decline. Copper, denominated in dollars, fell 6.1 percent in two days as the Dollar Index, a six-currency gauge of the greenback’s value, gained 0.8 percent.
“Base metals prices declined sharply, with market participants apparently taking a more cautious view of the outlook for metals demand,” David Moore, commodity strategist at Commonwealth Bank of Australia, said in an e-mail today.
Three-month delivery copper on the London Metal Exchange declined as much as 1.6 percent to $4,685 a metric ton, the lowest since May 28. The contract traded at $4,723 at 11:14 a.m. Singapore time.
“The World Bank has ostensibly poured a big jug of ice- cold water over those looking for a bounce in economic growth globally,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne.
Copper for September delivery in New York lost as much as 1 percent to $2.1235 a pound, also the lowest since May 28, and last traded at $2.1380. October-delivery copper on the Shanghai Futures Exchange fell as much as 3.1 percent to 36,900 yuan a ton, the lowest for a most-active contract since May 27.
The global economy may expand 2 percent next year and 3.2 percent in 2011, the World Bank said. In March, the Washington- based lender forecast 2010 growth at 2.3 percent.
Among other LME-traded metals, aluminum gained 1 percent to $1,589.50 a ton, zinc rose 1.1 percent to $1,519 a ton and lead added 1.5 percent to $1,626 a ton. Nickel was unchanged at $14,500 a ton, and tin hadn’t traded as of 10:52 a.m. in Singapore.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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