Copper Prices Decline Amidst Economic Concerns

Copper prices dropped on October 18, 2011, as investors remained wary of economic growth in China and European sovereign debt worries. Despite stronger equities, the metal's prices struggled to gain traction, ultimately settling down 0.5% at $3.3600 a pound on the Comex division of the New York Mercantile Exchange. The decline was attributed to concerns over demand, with China's economy growing 9.1% in the third quarter, less than the forecasted 9.25%. European debt issues also weighed on investor sentiment, with Moody's warning of potential challenges for France's triple-A rating.

Key Takeaways:

• Copper prices fell 0.5% to settle at $3.3600 a pound on the Comex division of the New York Mercantile Exchange.
• China's economy grew 9.1% in the third quarter, less than the forecasted 9.25%, affecting investor sentiment.
• European sovereign debt worries, particularly in France, dampened demand for copper.
• The Standard & Poor's 500 index rallied on strong earnings from the financial sector, reversing earlier losses.
• Bart Melek, head of commodity strategy at TD Securities, stated that slower economic activity in Europe has significantly impacted China, the world's most important commodity consumer.
• Edward Meir, senior commodity metals analyst with MF Global, believed that markets would reverse course over the week as European leaders address debt concerns.

Statistics:

• Copper prices fell 1.80 cents, or 0.5%, in afternoon trade.
• The Standard & Poor's 500 index rallied 1.3% to 1216.04.
• China's economy grew 9.1% in the third quarter compared to the same period last year.
• France's triple-A rating was put under pressure by Moody's Investors Service.
• Copper prices grazed lows of $3.2575 earlier in the day.

Sources:

• Dow Jones Commodities News via Comtex, Oct 18, 2011
• Bloomberg News, Oct 18, 2011
• Standard & Poor's 500 index, Oct 18, 2011
• Moody's Investors Service, Oct 18, 2011
• TD Securities, Oct 18, 2011
• MF Global, Oct 18, 2011