METALS-US concerns push copper to sharpest loss in a week

NEW YORK/LONDON (Reuters) – Copper prices fell by
their most in a week Wednesday, hit by worries over slowing
U.S. growth and whether the world’s largest economy will face a
credit rating downgrade.
A glum assessment by Federal Reserve Chairman Ben Bernanke
of the U.S. economy and Fitch Ratings’ latest caution over the
country’s credit ratings drove copper futures down 1 percent in
London and New York trading.
A rebound in the U.S. dollar — which occasionally serves
as a safe-haven when risk appetite for other assets falls —
added pressure on base metals.
Benchmark copper on the London Metal Exchange (LME) closed
down $95 at $9,045 a tonne. The metal used in power and
construction hit the lowest level in almost a week when it sank
to $8,952 during the session.
U.S. copper futures’ most-active contract, July, settled
down 4.1 cents at $4.0880 a lb.
“The outlook for copper is decidedly bearish now with U.S.
economic growth looking more suspect than ever in coming
months,” MF Global’s senior commodity analyst Edward Meir told
the Reuters 2011 Investment Outlook Summit.
The Fed’s Bernanke late Tuesday acknowledged the U.S.
economy had slowed but offered no hint that the central bank
would offer fresh stimulus after the expiry of its $600 billion
bond-buying program this month.
Fitch warned that it would slash the United States’ prized
AAA credit rating if the government missed bond payments.
U.S. government officials and investors said global markets
would suffer severe reverberations if lawmakers allowed the
country to default, because of their inability to agree on
increasing its debt ceiling.
Despite the specter of a worsening U.S. economy, the dollar
rose against a basket of currencies as it reverted to its role
as occasional safe-haven during times of global worries.
Tin closed at $25,695 from $25,825 a tonne, having hit its
lowest since December at $25,470. When 2011 began, tin was well
supported by falling supply from Indonesia.
“But now, (tin) supply is more or less adequate and
inventories are also OK,” VTB Capital analyst Andrey
Kryuchenkov said. “It is a better-supplied market than earlier
this year.”
Zinc, used in galvanizing, ended at $2,293 from $2,272 and
battery material lead rose to its highest since April at
$2,585.50 from $2,548. It closed at $2,577.