Monday, December 10, 2018
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commodities set for worst run since ‘98 on europe, china concern

commodities declined for a tenth day, set for the longest losing streak since 1998, on concern that europe’s debt crisis will worsen as greece remains without a government while economic growth in china may slow further.

the standard & poor’s gsci spot index of raw materials fell as much as 0.5 percent to 632.7, and traded at 634.35 by 7:12 a.m. in london. oil futures traded near a five-month low in new york and copper dropped to the lowest price since january on the london metal exchange. spot gold and silver declined.

the euro extended losses after moody’s investors service’s downgraded italian banks yesterday and speculation persisted that greece may be forced to abandon the single currency. data today may show that the region’s economy contracted for a second quarter. china may grow at the weakest pace in 13 years in 2012, according to a forecast from pacific investment management co.

“i don’t know where the bottom is,” said koun-ken lee, a singapore-based strategist at standard chartered plc. “prices may depend on what transpires in europe. commodity fundamentals remain tight and we are bullish for the second half.”

europe shrank 0.2 percent in the three months to march, according to the median estimate of 25 economists surveyed by bloomberg before a report today that may show the region is in recession. more than a week after inconclusive elections, greek president karolos papoulias is seeking support for a government of non-politicians. a greek euro exit would spark speculation other countries may follow, according to jefferies international.

slowing growth

inbound investment in china, the largest user of metals, slid 0.7 percent in april from a year earlier, the ministry of commerce said today. china’s economic growth this year may be in “mid 7-percent range,” according to ramin toloui, pimco’s global co-head of emerging markets portfolio management.

the s&p gsci has dropped 7.5 percent this month following declines in march and april. that exceeded the 5.7 percent loss in the msci all-country world index (mxwd) of stocks. investors pulled $260 million out of commodity index exchange-traded funds last week, the most this year, according to standard chartered.

crude for june delivery fell as much as 0.9 percent to $93.91 a barrel on the new york mercantile exchange, near yesterday’s intraday low of $93.65, which was the cheapest since dec. 19. three-month copper retreated as much as 1 percent to $7,763.50 a metric ton, the lowest level since jan. 12, and last traded at $7,814.75

spot gold dropped as much as 0.6 percent to $1,547.75 an ounce, a level last seen in december. silver dropped for a seventh day, trading 0.2 percent lower at $28.1025 an ounce.

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