Copper traded near the lowest in more than four years as concern that Greece will exit the euro area weighed on markets, bolstering speculation that consumption will slow.
Asian stocks fell for a second day, extending a global selloff as crude oil traded near its lowest since 2009. The prospect of Greece leaving the currency block is weighing on trading, helping send the euro to an almost nine-year low against the dollar.
“Any development on Greece triggers earthquakes in the broader market from bonds to equities, from which commodities cannot survive,” said Fang Junfeng, an analyst at Shanghai Cifco Futures Co.
Copper for delivery in three months on the London Metal Exchange fell 0.2 percent to $6,136 a metric ton by 4:14 p.m. in Shanghai. The metal slid 1.8 percent to close at $6,145 a ton yesterday, the lowest since June 2010. Price are down 2.6 percent this year following a 14 percent loss in 2014.
Prices are also dropping amid slowing winter demand from Chinese downstream users and a continuous increase in stockpiles in London and Shanghai warehouses, Fang said. “I won’t be surprised if copper extends losses,” he said.
Inventories of the metal tracked by the LME gained 0.8 percent to 178,425 tons yesterday, the highest since May, while stockpiles at warehouses registered with the Shanghai Futures Exchange rose to the highest since April, according to bourse data.
China is accelerating 300 infrastructure projects valued at 7 trillion yuan ($1.1 trillion) this year as policy makers seek to shore up growth that’s in danger of slipping below 7 percent. The country is the world’s largest metals consumer.
“China’s spending on infrastructure is expected to be higher this year than 2014,” said Xu Yongqi, a Shanghai-based analyst at Guotai & Junan Futures. “Whether the investment will boost consumption of base metals is doubtful.”
The country’s official Purchasing Managers’ Index in December slid to the lowest in 18 months, data showed last week. A gauge of its service industry released today by HSBC Holdings Plc and Markit Economics rose to 53.4 last month from 53 in November.
In New York, copper futures for March were little changed at $2.7645 a pound. The March contract on the SHFE dropped 0.6 percent to close at 44,800 yuan ($7,212) a ton.
On the LME, nickel, aluminum, zinc and lead fell while tin rose.