Industrial production in France, Europe's third-largest economy, unexpectedly fell in July, national statistics office Insee said today. Javier Solana, European Union foreign policy chief, said his meeting yesterday with Ali Larijani, Iran's top negotiator, was ``productive,'' easing concerns the country may halt oil exports.
``Demand growth for metals will moderate a bit just as supply starts to pick up quite nicely,'' David Thurtell, a metals analyst at BNP Paribas in London, said in an interview. ``Over the next year or so, I'm expecting softer prices.''
Copper for delivery in three months on the London Metal Exchange fell $190, or 2.4 percent, to $7,630 a metric ton as of 1:10 p.m. local time. Copper for December delivery on the Comex division of the New York Mercantile Exchange declined 3.4 percent to $3.4455 an ounce. The metal has gained 73 percent on the LME this year, trading at a record $8,800 on May 11.
Aluminum lost $82 to $2,555 a ton and nickel shed $200, or 0.7 percent, to $27,800 a ton. Lead slipped $15 to $1,320 and tin declined $95 to $9,055. Zinc was down $95, or 2.7 percent, at $3,405 a ton. Oil in New York fell 1.3 percent to $65.37 a barrel. Gold slid 2.3 percent to $596.95 an ounce.
French industrial production dropped 1.3 percent in July, compared with an expected 0.3 percent gain, based on the median forecast of 28 economists polled by Bloomberg News.
Global Slowdown
The Organization for Economic Cooperation and Development's composite leading economic indicator for 23 countries fell to 109.5 in July, the OECD said Sept. 8. That's the weakest measure since March and 0.3 point below June's level. Copper is used in construction and industries such as transportation and energy.
Investors are also concerned about a slowdown in home construction in the U.S., the world's second-largest user of copper. The National Association of Realtors, the U.S. industry's largest trade group, cut its forecast for 2006 sales last week, saying record home supply may erode prices for the first time in 13 years.
Housing accounts for 37 percent of U.S. copper demand, according to Citigroup Inc. A surge in construction last year contributed to a doubling of copper prices.
Declining metals prices pulled down mining stocks. Shares of BHP Billiton Ltd., the world's largest miner, dropped as much as 5.1 percent in London, the largest one-day decline since June 8. Anglo American Plc, the second-biggest, lost as much as 4.5 percent.
Inventory Decline
Losses in copper may be limited because stockpiles tracked by the LME are equal to less than three days of global consumption. Inventory monitored by the LME dropped 3,625 tons, or 2.9 percent, to 121,525 tons, the exchange said today in a daily report. That's the largest one-day decline since June 20.
Since copper, zinc and aluminum traded at records on May 11, LME-traded metals have slumped 7.7 percent, based on the LMEX Index. That's less than the 12 percent drop in the Reuters/Jefferies CRB Commodity Price Index of 19 commodities including energy and agricultural products over the same period.
``We mustn't get alarmed by a little liquidation that is going on,'' Philip Manduca, who helps manage about $500 million in assets at Titanium Capital, said today in an interview in London. Demand from China will boost commodities including copper, where supply remains limited, he said.
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