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Zinc slides 2.3%, Copper Fluctuates on Gain in U.S. Retail Sales, China Tightening Concern
By Maria Kolesnikova - Nov 15, 2010 6:16 AM PT

Copper fluctuated in New York on concern that China may take more steps to curb its economic growth and a stronger-than-estimated gain in retail sales in the U.S., the world’s second-biggest user of the metal.

U.S. purchases climbed 1.2 percent in October, the most since March, Commerce Department figures showed today. Earlier copper slid as much as 1.2 percent on the Comex, after falling the most in four months on Nov. 12, on concern that China might take more steps to slow its economy.

“The market has certainly been unnerved by the Chinese tightening fears, though the market also seems very bullish as to copper’s longer-term prospects, with the recent selloff triggering dip-buying interest,” Leon Westgate, an analyst at Standard Bank Plc in London, said in a report today.

Copper for delivery in March rose 0.8 cent, or 0.2 percent, to $3.906 a pound at 8:59 a.m. on the Comex. The most-active contract added as much as 1.5 percent. Copper for delivery in three months dropped 0.3 percent to $8,586 a metric ton on the London Metal Exchange.

The median estimate of 74 economists surveyed by Bloomberg News projected a 0.7 percent advance in U.S. retail sales. Figures due tomorrow may show that industrial production in the country gained in October after falling in the prior month, according to a separate survey.

Bank Reserves

Copper slid earlier today as China’s benchmark money-market rate rose to the highest level in seven days after the central bank ordered lenders to set aside more funds as reserves. The country is the world’s largest copper user.

The People’s Bank of China may raise interest rates twice late this year and early next year, the Economic Daily reported on its website today, citing Chen Xikang, a researcher with the Chinese Academy of Sciences.

Industrial metals may decline by another 10 percent to 15 percent in coming weeks, according to Robin Bhar, an analyst at Credit Agricole SA’s investment-banking unit in London.

“We’ve rallied strongly, particularly in copper, and for copper we could come back to look at the $8,000 level, which is a key psychological level,” he said. “We’ve rallied from $7,000 to a new high in copper very, very quickly, so to give something back wouldn’t be unexpected.”

Mine Strike

In Chile, Anglo American Plc and Xstrata Plc continued to produce copper at a normal rate at the Collahuasi mine, the world’s fourth-largest, as a strike by workers entered a 12th day. LME copper rose to a record $8,966 a ton last week, partly on concern shipments at the mine, which accounts for more than 3 percent of world production, may be disrupted.

Zinc for three-month delivery on the LME slid 2.3 percent to $2,339 a ton and lead declined 2.4 percent to $2,460 a ton. Growth in Chinese lead consumption probably will slow to 11 percent in 2010 from 16.5 percent last year as demand from auto production and telecommunications weakens, according to Beijing Antaike Information Development Co.

Tin for three-month delivery on the LME fell 2.9 percent to $25,380 a ton. Prices reached a record $27,500 on Nov. 9. The metal has jumped 50 percent this year, leading LME advances, after production was disrupted in Indonesia and the Democratic Republic of the Congo.

Aluminum declined 0.9 percent to $2,382 a ton and nickel dropped 0.7 percent to $22,525 a ton.

http://www.bloomberg.com/news/2010-11-15/copper-falls-for-second-day-on-concern-china-may-move-again-to-curb-growth.html