Copper traders turn most bearish in six weeks on slowing demand

LONDON: Copper traders are the most bearish in six weeks on concern demand will slow in China, Europe and the US at a time when hedge funds are betting on lower prices.

Thirteen analysts surveyed by Bloomberg said they expect prices to drop next week and nine were bullish. A further six were neutral, making the proportion of bears the highest since June 1. Speculators have been wagering on a price drop since May and held a net-short position of 1,749 contacts on July 3, US Commodity Futures Trading Commission data show.

More than $1.2 trillion has been wiped from the value of global equities since early July amid concern growth is stalling. Federal Reserve policy makers said at their June meeting that strains from Europe's debt crisis may spill over into the US. Copper imports to China, which accounts for about 40% of demand, slid to a 10-month low in June.

"People are quite concerned about slowing growth in China which leads to slowing demand for industrial metals," said Daniel Briesemann, an analyst at Commerzbank in Frankfurt. "We should know about almost all the risks in Europe for now, but it's definitely not positive. At the moment, everything is sentiment driven."

The world's second-largest economy expanded 7.6% in the last quarter from a year earlier, China's National Bureau of Statistics said in Beijing. The pace, a three-year low, compares with an 8.1% gain in the previous period and the 7.7% median forecast of economists.

Copper fell 0.3% to $7,577 a tonne this year on the London Metal Exchange after slumping 21% last year. The MSCI World Index of equities gained 2% since the start of January and the S&P GSCI gauge of 24 commodities slid 4.6%. Analysts at Credit Suisse Group, JPMorgan Chase & and Barclays reduced their forecasts for 2012 copper prices this week.