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Zinc slumps, Comex Copper Slides On Global Economic Worries

Jun 29, 2010 (Dow Jones Commodities News via Comtex) --

By Allen Sykora
Of DOW JONES NEWSWIRES

Copper futures slumped Tuesday on worries about economic growth, with global stock markets also weaker after disappointing economic data in China and Japan.

Around 9:10 a.m. EDT (1310 GMT), copper for September delivery was 9.30 cents, or 3%, weaker at $2.9965 per pound on the Comex division of the New York Mercantile Exchange. The nearby July contract slid 8.90 cents, or 2.9%, to $2.9830.

"There are still a lot of doubts about how strong the economy will get," said Stephen Platt, analyst with Archer Financial Services in Chicago.

Thus, he said, the market remains "vulnerable," particularly amid concerns about how strong demand will be from China, the world's largest copper-consuming nation.

A New York trader blamed copper's losses on a combination of overnight weakness in China's stock market, worries about the Chinese economy and a stronger U.S. dollar.

The Conference Board downwardly revised its leading economic indicator for China to a gain of 0.3% for April, compared to the previously reported 1.7% rise. Also, Japan reported that industrial production slipped 0.1% in May, while household spending fell 0.7%.

The September S&P 500 futures were around 14.40 points lower. China's Shanghai Composite Index fell 4.3%, with pressure coming from the economic data and a slightly lower-than-expected pricing range for the domestic part of Agricultural Bank of China's initial public offering. Hong Kong's Hang Seng Index fell 2.3% and Japan's Nikkei Stock Average shed 1.3%.

The euro has fallen to $1.2202 from $1.2276 late Monday on worries about global economic growth. A stronger dollar makes copper more expensive for holders of other currencies and thus can hurt international demand.

Still, there are some supportive factors keeping copper from declining further, Platt said. Inventories stored in London Metal Exchange warehouses keep declining, falling another 1,225 metric tons Tuesday to 451,950. Also, canceled warrants, which are earmarked for delivery, continue to rise.

-By Allen Sykora, Dow Jones Newswires; 541-318-8765; [e-mail]

(END) Dow Jones Newswires

06-29-10 0926ET

http://news.tradingcharts.com/futures/7/1/141753417.html