Copper falls to three-year lows
25 Oct 2008
Copper dived 10 per cent to a three-year low on Friday, following equity markets into a tailspin on the threat of a global recession and as the dollar strengthened. The metal, used in power and construction, was also pressured by data that showed sales of new homes in the US fell in August to their lowest point in more than 17 years.
Copper for three month delivery on the London Metal Exchange fell to a low of $3,665 a tonne from $4,040 at the close on Thursday. It pared losses to close at $3,775. The three-month copper contract posted its biggest weekly fall - more than 20 per cent - in the last three decades. It has slumped over 50 per cent since July's record high of $8,940.
In New York, copper for December delivery ended down 6.10 cents at $1.8045 a pound on the New York Mercantile Exchange's COMEX division, up from an early trough at $1.7180 - another three-year low.
However, according to expert opinion, this is not the end of the fall. Traders increased bets on a rate drop next week. Interest- rate futures show an 86 per cent chance the US Federal Reserve will lower borrowing costs to 1 per cent on 29 October, compared with a 46 per cent chance a week ago.
Chile's state-owned Codelco, the world's largest copper miner, echoed that sentiment, with Chief Executive Jose Pablo Arellano telling reporters in Santiago on Thursday that the super cycle of high copper prices was over.
