METALS-Copper sinks to 2011 low in commodity free-fall
* Copper crumbles to lowest since December 2010
* CRB heads for biggest weekly decline since Dec 2008
* U.S. weekly jobless claims rise to 8-month high
* Coming up: U.S. monthly unemployment report Friday (Recasts, adds double dateline/byline, adds closing copper price, adds graphic and analyst comments)
By Chris Kelly and Sue Thomas
NEW YORK/LONDON, May 5 (Reuters) - Copper nosedived more than 3 percent on Thursday to its lowest level since December as fears about sputtering global growth and growing inflation risk triggered a vicious cross-commodity crash.
The 19-commodity Reuters-Jefferies CRB index .CRB was last off almost 5 percent on the day and 8 percent so far this week, heading for its biggest weekly decline since December 2008, as prices of oil, metals and grains plunged amid the widespread liquidation. [COM/WRAP]
Tepid economic data from top metal consumers the United States and China, as well as in Europe, have stoked concerns about global growth and the impact on demand for base metals.
German industrial orders unexpectedly fell in March while U.S. weekly jobless claims hit eight-month highs, and productivity growth slowed. [ID:nLDE74414K] [ID:nN05290682]
"The economically-sensitive commodities just have a tough road ahead of them because the economy in the U.S. and the global economy are just not going to be robust," said Shawn Hackett, president of Hackett Financial Advisors, Inc. in Boynton Beach, Florida.
"The economy is just not going to provide the cyclical demand for cyclical commodities that it has in the past."
London Metal Exchange (LME) copper for three-month delivery CMCU3 hit a session trough at $8,744.25 per tonne, its lowest since December, before ending down $304 at $8,820.
In New York, the July COMEX copper contract HGN1 plunged 13.60 cents or 3.3 percent to settle at $3.9980 per lb.
Copper's losses put it on track for its biggest weekly decline since mid-March.
Tin CMSN3 was the biggest loser in the complex, sinking more than 7 percent to $28,500 at one point, its lowest since March. It closed at $28,900 from Wednesday's last bid price of $30,950.
(For a graphic on commodities performance in 2011, click: r.reuters.com/nab49r )
"It's a broad-based, risk-off selling momentum that has gathered pace," said Barclays Capital analyst Gayle Berry.
"Something has spooked the market, sentiment has nose dived and I think the fact that it is sentiment driven is illustrated in that it's not just happening in the base metals."
That "something," Berry said, could include the prospect of easy monetary policy ending in June, big political developments, including the death of Osama bin Laden, uncertainties about Chinese monetary policy, as well as faltering U.S. growth.
The euro fell against the dollar and headed for its biggest one-day slide against the U.S. currency since November after the European Central Bank signaled that interest rates were unlikely to rise next month. [USD/]
A stronger dollar makes commodities cheaper for holders of other currencies.
Reuters Insider TV: Commodities Tumble on Economy Fears:
Graphics: Commodities correlations with dollar:
Base metals fundamentals also pointed to faltering demand, with data on Thursday showing a large 3,525-tonne build in copper inventories, with big inflows into south Asian locations.
The build boosted LME copper stock levels to their highest since June 2010, at 467,450 tonnes. <0#LME-STOCKS>
"For a while people ignored the fundamental news, because so much money was cheap and available," Alex Heath, RBC Capital Markets head of base metals, said.
"But now people are looking at what is going on industrially, particularly from a global recovery perspective, and are thinking this looks a bit overdone, let's lock in some profits." Metal Prices at 1815 GMT COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct
move COMEX Cu 400.10 -13.30 -3.22 444.70 -10.03 LME Alum 2635.00 -115.00 -4.18 2470.00 6.68 LME Cu 8819.00 -305.00 -3.34 9600.00 -8.14 LME Lead 2296.00 -159.00 -6.48 2550.00 -9.96 LME Nickel 24520.00 -1305.00 -5.05 24750.00 -0.93 LME Tin 28850.00 -3450.00 -10.68 26900.00 7.25 LME Zinc 2124.50 -65.50 -2.99 2454.00 -13.43 SHFE Alu 16720.00 -120.00 -0.71 16840.00 -0.71 SHFE Cu* 67040.00 -870.00 -1.28 71850.00 -6.69 SHFE Zin 16720.00 -495.00 -2.88 19475.00 -14.15 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Chris Kelly; Editing by Alden Bentley)
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