Copper fell, snapping four days of gains, on

renewed concern demand will drop as fresh data

showed the global recession is deepening.

The U.S. economy shrank in the fourth quarter at

the steepest rate since 1982, the Commerce Department

said today. Consumer spending fell at the fastest

pace in almost 30 years. Japan’s manufacturers cut

production by a record last month and economic growth

slowed in India and Malaysia last quarter. Copper,

used in homes and cars, fell as much as 6.5 percent.

Copper futures for May delivery slipped 4.05 cents,

or 2.6 percent, to $1.5385 a pound on the New York

Mercantile Exchange’s Comex division. The most-active

contract climbed 7.4 percent for the week, the

first gain in three.


The revised 6.2 percent drop in U.S. gross domestic

product, on an annual basis, took analysts by surprise.

The median projection of 74 economists surveyed

by Bloomberg News was 5.4 percent.


Consumer spending tumbled at a 4.3 percent annual

pace last quarter, the sharpest rate of decline

since 1980, after falling at a 3.8 percent rate

the previous three months. That marks the first

back-to-back decreases of more than 3 percent

since record-keeping began in 1947.


Copper rose for the first four days of this week

on renewed investor optimism as governments planned

spending to stimulate the U.S., Chinese and

European economies.

Economic Outlook

Today’s U.S. economic data is “a wake-up call for

those expecting a recovery in 2009,” Chris Rupkey,

chief financial economist at Bank of Tokyo-Mitsubishi

UFJ Ltd. in New York, said in an e-mail. Copper has

plunged 60 percent in the past 12 months as slumping

housing markets, mounting job losses and declining

manufacturing strangled global economic growth.

The metal will average $1.275 a pound this year as

production outpaces demand, Deutsche Bank AG forecasts.

That’s 60 percent lower than last year’s average

price of about $3.18 in New York.
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“We believe copper is the most exposed of the industrial


metals in an environment where real-economy data

deteriorates further,” analysts at Deutsche said

in a report today.


Confidence among U.S. consumers fell for the first

time in three months in February, the Reuters/University

of Michigan index showed today. U.S. business

activity contracted in February for a fifth consecutive

month, the Institute for Supply Management-Chicago

Inc. said.

“Businesses and consumers are refusing to spend,

and until they come off the sidelines, the economy

is at risk for further declines,” Rupkey of Bank

of Tokyo-Mitsubishi said.

On the London Metal Exchange, copper for delivery in

three months slid $51, or 1.5 percent, to $3,449 a

metric ton ($1.56 a pound). The price reached a

record $8,940 on July 2.