Copper drops as consumers restrain spending

AP News
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Posted: Sep 14, 2011 4:22 PM
Copper drops as consumers restrain spending

Copper prices fell Wednesday after a new report showed Americans kept their spending in check last month.

Retail sales were flat in August as consumers spent less on automobiles, clothing and furniture, the Commerce Department said.

It was the latest in a series of reports that point to a slowing economy, which could diminish demand for a wide range of commodities from copper to gasoline.

The report indicates that consumers "are pulling back and do not feel very optimistic," IHS Global Insight economist Chris G. Christopher Jr. said in an email.

In addition, China, a huge importer of commodities, has slowed purchases of copper, said Country Hedging LLC market analyst Sterling Smith.

The industrial metal is used in a variety of products from electronics to wiring and pipes. Copper for December delivery dropped 7.2 cents to finish the session at $3.898 per pound. The price has fallen about 12 percent this year.

Other commodity prices were mixed as European leaders sought a solution to the region's sovereign debt problems.

The leaders of Greece, Germany and France said they agreed that Greece is an "integral" part of the 17-nation region that uses the euro as currency.

Investors have wondered if the crisis will affect the United States and what the long-term implications may be for European countries, MF Global senior market strategist Rich Ilczyszyn said.

"Until we get some of these questions answered, I think everybody's a little bit gun-shy," he said. "There's just too much global risk at this point."

In metals contracts for December, silver fell 66 cents to finish at $40.533 an ounce and palladium fell $7.50 to $721 an ounce. October platinum rose $2.40 to $1,815.90 an ounce. December gold fell $3.60 to finish at $1,826.50 an ounce.

In other trading, benchmark oil fell $1.30 to end at $88.91 per barrel on the New York Mercantile Exchange. Heating oil rose 0.89 cent to $2.945 per gallon, gasoline futures fell 1.66 cents to $2.7258 per gallon and natural gas rose 5.9 cents to $4.039 per 1,000 cubic feet.

Agricultural contracts were mixed.

Wheat for December delivery rose 2.5 cents to finish at $7.045 per bushel, December corn rose 1.25 cents to $7.2425 per bushel and November soybeans fell 9 cents to $13.8275 per bushel.

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AP Writers Martin Crutsinger, Christopher S. Rugaber and Elena Becatoros contributed to this report.