Copper hits 9-month low on demand fears

Commodities fell to the lowest in a week, led by copper's drop to a nine-month low, on speculation that demand for raw materials will decline after European policymakers failed to introduce a plan to stem the region's debt crisis. Industrial users of metals and energy and companies that use agriculture commodities to make food may slow purchases, waiting on a solution to the euro crisis. International monitors this week will assess whether Greece can meet the conditions of rescue loans and avoid default. "People are waiting on the sidelines to see if prices get cheaper," said Gary Mead, an analyst at VM Group in London. "Industrial end-users and consumers in the wholesale sense are in a wait-and-see mode. It's clearly the fact that there's no decision on the table for the end of the euro crisis. There's a tremendous amount of fear out there." The Standard & Poor's GSCI Spot Index shed as much as 1 per cent to 645.79, the lowest level since September 12, extending last week's 1 per cent loss. Copper for three-month delivery declined 3.6 per cent to $8,386 a metric tonne on the London Metal Exchange in early morning local time, the lowest price since December 1. Miners' strike Copper had been supported by strikes at Freeport-McMoRan Copper & Gold Inc.'s mines in Indonesia and Peru. Freeport resumed mining at its Grasberg mine over the weekend as 1,500 workers returned to the site in Indonesia's Papua province. Miners in Peru may strike again on September 27, a union official said, after they returned to their jobs this weekend ending a four-day work stoppage. The S&P GSCI Spot Index has tumbled 4 per cent this month, extending the 1.7 per cent loss in August. Concerns that there may be an economic slowdown in the Eurozone and the US have outweighed the effects of constrained supplies of crude and copper. A report this week may show US home construction dropped to a three-month low. Finance chiefs from the euro region said last week the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.