November 10, 2011 / 4:31 AM / 6 years ago

COMMODITIES-Copper leads decline on Italy troubles, China slowdown

* Copper falls a fifth day, longest losing streak since Oct.

* China reports smaller-than-expected trade surplus

* Italy’s debt crisis comes on heels of Greece troubles

* USDA cuts corn, soybean harvest forecasts

By Jane Lee

KUALA LUMPUR, Nov 10 (Reuters) - Markets fell on Thursday, led by copper, after Italy’s rising borrowing costs, coupled with Greece’s debt troubles, heightened concern the euro zone crisis is spreading and China’s exports rose at their slowest in eight months.

Copper declined for a fifth day in its longest losing streak in more than a month while grains and gold futures GCcv1 slipped, though crude LCOc1 was steady above $112.

“Conditions in Europe have become like playing whack-the-mole -- put one down only to see another one pop up,” said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors Ltd., which has A$97 billion ($99 billion) in management.

“This will continue until the European Central Bank start a quantitative easing, which is to print as much money as necessary to buy Italian and Spanish bonds.”

As Italy moved to the spotlight of the euro zone crisis, a deal to form a Greek national unity government collapsed, with the country headed towards an economic abyss, hours after outgoing Prime Minister George Papandreou said he was handing over to a coalition that does not exist.

China’s trade surplus in October was at $17 billion, customs figures showed on Thursday, versus analyst expectations in a Reuters poll for exports to exceed imports by $24.9 billion.

Tokyo’s Nikkei share average fell 2.5 percent, while MSCI’s broadest index of Asia Pacific shares outside Japan lost 1.1 percent.


LME copper fell as low as $7,430.50 a tonne during the session, its cheapest since Oct. 25. Prices have lost 22 percent this year, snapping two annual gains.

The most active January copper contract on the Shanghai Futures Exchange SCFc3 fell more than 5 percent at the market open on Thursday to as low as 54,830 yuan ($8,648) a tonne.

The most-active U.S. gold futures contract GCcv1 erased 1.7 percent to $1,761.70 an ounce. Spot gold dropped 0.6 percent to $1,759.79 an ounce in its third day of decline. Prices are still up 24 percent this year, set for an 11th year of gains.

U.S. stocks tumbled 3 percent in the market’s worst day since mid-August on Wednesday, when the 19-commodity Reuters-Jefferies CRB index fell 1.3 percent, snapping five consecutive sessions of gains.


China’s exports rose 15.9 percent in October from a year ago, the customs office said on Thursday, well below market expectations of a 16.5 percent gain and down from the 17.1 percent increase recorded in September.

The slower growth raised concern that Europe’s troubles are slowing demand for China’s manufactured goods.

In London, ICE Brent crude for December delivery LCOc1 was steady at $112.33 a barrel, up 2 cents, after dropping to a session low of $112.11.

U.S. crude for December CLc1 traded at $95.67 a barrel, falling 7 cents. Futures on Wednesday climbed to their highest in more than three months.


Grains fell as concern over Italy’s debt woes outweighed demand fundamentals.

Chicago Board of Trade corn for December delivery Cc1 shed 0.3 percent to $6.53-3/4 per bushel in early trade. It ended Wednesday down 0.7 percent after the U.S. government slashed its forecasts of the U.S. 2011 corn and soybean harvests, now drawing to a close.

Wheat for December delivery Wc1 eased 0.3 percent to $6.41 per bushel following a drop of 2.1 percent on Wednesday as investors became risk averse on worries about Europe’s growing debt crisis crimping demand. Also weighing on wheat prices was the U.S. government confirmation of adequate global supplies.

Soybeans for January delivery Sc2, the most active contract, fell 0.2 percent to $11.83-1/2 per bushel, adding to the previous day’s 1.6 percent decline. (With additional reporting by Carrie Ho, Francis Kan, Rujun Shen and Naveen Thukral; Editing by Clarence Fernandez)

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