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EU causes lower copper pr. - .09 $3.24

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METALS-Copper hits one-month low on slowdown woes
Wed Nov 23, 2011 11:53am GMT

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* HSBC flash China PMI contracts, lowest in 32 months* Euro zone industrial new orders slump in Sept* Coming up: US durable goods for October at 1330 GMTBy Melanie BurtonLONDON, Nov 23 (Reuters) - Copper hit a one-month low on Wednesday, onworries a global slowdown would corrode demand after factory growth in topconsumer China slowed in November while a poor bond sale in Germany intensifiedconcerns about the euro zone debt crisis.Copper traded at $7,225 a tonne at 1059 GMT, down 1.4 pct from aclose of $7,330 a tonne. The metal used in power and construction has fallen 8.4percent so far in November.Aluminium also hit its lowest in more than a year, while nickeltouched its weakest in two months.Metals markets have been battling mounting evidence of slowing Chinesefactory growth, a European return to recession and a political deadlock in theU.S. over budget reduction, all of which cast a shadow over industrial demandnext year."It's been pretty ugly all round. The question is whether markets have fullypriced that in," said analyst Nic Brown of Natixis."The Chinese economy is slowing and the authorities are waking up to thatfact...It's now a question of whether they are prepared to ease monetaryconditions as a result," he added.Chinese factories battled with their weakest activity in 32 months inNovember, a preliminary purchasing managers' survey showed, reviving worriesthat China may be skidding towards an economic hard landing and compoundingglobal recession fears.China is the world's top consumer of base metals, and accounts for around 40percent of global refined demand.Negative sentiment extended to Europe where stocks and the single currencywere also under pressure.One of Germany's worst bond sales since the launch of the euro promptedconcerns the debt crisis was even beginning to threaten Berlin on Wednesday,with the Bundesbank forced to buy large amounts of the bonds to ensure theauction did not fail.Also hitting sentiment, Euro zone industrial new orders slumped in Septemberfrom August, EU statistics showed, the deepest fall since December 2008 and farworse than economists had forecast.Investment bank JPMorgan Chase & Co lowered its Brent and U.S. crude priceforecasts for 2012 and downgraded commodities to underweight partly due to theeconomic uncertainty in Europe, the United States and signs of weaker growth inChina."A sharp decline in LME three-month copper in September was one of theprimary real-time indicators that Europe was entering recession," the bank said.COPPER DEFICTMarkets are seen choppy ahead of U.S. Thanksgiving holiday on Thursday thatis expected to drain liquidity this week."A lot of pressure from America will be taken away because often we seeselling in the afternoon. I don't think we are up for big, big correction --support for copper at $7,200 looks like it wants to hold," a London trader said.In other news, the world refined copper market was in deficit of 161,000tonnes in the first eight months of the year, compared with a deficit of 339,000tonnes in the same period last year, an industry report showed on Tuesday.The industry body sees a 250,000 tonne production deficit in 2012, beforeeasing to become near balanced in 2013 as global growth slows, it said inOctober.On balance, new mine supply is not expected to meet climbing demand,although new medium-sized projects will come onstream.Anglo American said this week it expects its Chilean Los Bronces mine tomore than double annual copper output from 2010 to produce a peak of 490,000tonnes of copper annually, to become the world's No. 5 copper mine.More immediately, copper stocks rose for a second session, arresting anoutflow from east Asian locations, mostly enroute to bonded warehouse in China,where analysts said stockpiles have grown in recent weeks.