International Monetary Fund had cut its economic forecasts for the US and Japan on Monday.
Copper fell for a second day from a five-week high after the International Monetary Fund cut its economic forecasts for the US and Japan, and as Alcoa Inc’s sales trailed estimates. Zinc and lead also declined.
Three-month-delivery copper on the London Metal Exchange lost as much as 0.8 per cent to $9,780 a tonne and was at $9,782 at 10:15 am Singapore time. The contract, which reached $9,944.75 a tonne yesterday, the highest price since March 4, also declined as Japan battled aftershocks and continuing radiation leaks from a stricken nuclear plant.
“It’s a good excuse to take profit after the strong rally, against the backdrop of ongoing economic uncertainties,” Fan Haibo, an analyst at Cinda Securities Co., said from Beijing. “Investors have been reined in by more earthquakes in Japan and a reminder that the nuclear crisis there is not over.”
The US economy will expand at a slower pace than earlier predicted, the IMF said yesterday, citing higher oil prices and a lackluster recovery in the labor market. The Washington-based fund also trimmed its estimate of Japan’s growth after the nation’s March 11 earthquake and tsunami.
Sales at Alcoa increased 22 per cent to $5.96 billion from a year earlier, the company said yesterday, lower than the $6.06 billion analysts in a Bloomberg survey were expecting. The largest US aluminum producer said its earnings were curbed by a weaker dollar and higher costs of energy and raw materials.
Nuclear Crisis
May-delivery copper on the Comex in New York dropped as much as 0.4 per cent before trading little changed at $4.4625 a pound. The contract dropped the most in a week yesterday. The metal for June-delivery on the Shanghai Futures Exchange fell for the first time in five days, falling as much as 0.7 per cent to 72,850 yuan ($11,161) a tonne.
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Japan’s nuclear crisis was raised to the highest level of severity, matching Chernobyl’s rating, as worsening radiation from the damaged Dai-Ichi plant prompted the government to widen the evacuation zone and as aftershocks rocked the country.
A magnitude-6.4 earthquake struck off the coast of Chiba, the prefecture east of Tokyo, today, following a 6.6-magnitude temblor yesterday and a magnitude-7.1 aftershock on April 7.
Zinc in London fell 1.3 per cent to $2,511 a ton, lead lost 0.4 per cent to $2,845 a tonne and aluminum declined 0.5 per cent to $2,675.25 a tonne. Nickel dropped 0.3 per cent to $27,615 a tonne, while tin hadn’t traded as of 10:02 am in Singapore.