copper futures decline in new york

Copper Futures Decline in New York on Renewed Equity Concerns

By Millie Munshi

Aug. 2 (Bloomberg) -- Copper futures in New York fell for a second day after some U.S. shares dropped, renewing concerns that equity losses may spread to commodities.

The Standard & Poor's 500 Index fluctuated betweens gains and declines today. In July, the index posted its biggest monthly slide in three years, fueled by concerns that defaults in U.S. subprime mortgages may spill over to other credit markets. Copper fell 2.1 percent in the past two sessions on speculation a declining equity market may slow the U.S. economy.

``If the stock market starts to sell off again, we're going to see a sell-off across all asset classes, especially metals including copper,'' said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``All eyes are on the stock market.''

Copper futures for September delivery fell 1.2 cents, or 0.3 percent, to $3.573 a pound on the Comex division of the New York Mercantile Exchange. The metal has still gained 24 percent this year.

Industrial metals ``could be more sensitive to concerns in the credit market than other commodities,'' Michael Lewis, global head of commodity research at Deutsche Bank AG, said yesterday.

Factory Orders

Copper also fell after a report showed June orders placed with U.S. factories rose 0.6 percent, less than the gain of 1 percent predicted by analysts.

``All economic indicators that point to a slowdown are going to be a reason for concern,'' Goodis said.

Declines in other metal also pushed the copper price lower, said Lorne Kalisky, president of Vican Trading Inc. in Montreal. On the London Metal Exchange, nickel for delivery in three months fell 2.8 percent to $29,900 a metric ton, the lowest closing price since Nov. 17. Zinc and aluminum also declined, while copper was little changed at $7,875 a ton.

Copper climbed as much as 1 percent earlier as labor disruptions in Mexico renewed concern that output will trail demand for the metal used in pipes and wires.

Southern Copper Corp. workers disrupted production at Cananea, Mexico's largest copper mine, for a fourth day to press for a new wage contract. The company, the world's fifth-largest copper producer, said it also remains in wage talks with unions in Peru in a bid to avoid a strike.

``We've seen continued strength in demand, and the supply side is still working very hard to keep up with that,'' Tom Albanese, chief executive officer of Rio Tinto Group, said in an interview today in London.

Rio Tinto, the world's third-largest mining company, said today that first-half profit fell for the first time in four years as copper output declined. Miners have struggled to increase production as the price of copper has gained fourfold in the past four years.

To contact the reporter on the story: Millie Munshi in New York at [email protected] .

Last Updated: August 2, 2007 14:47 EDT