Market and product

Price swings in copper, nickel andzinc slid to the lowest levels in about a decade, a signal thatrising supplies and a slowdown in China have kept investors awayfrom the markets after a decade of high returns.

The 100-day historical volatility in three-month copper onthe London Metal Exchange fell to 14.9 percent, the lowest sinceOctober 2003, from as much as 71.4 percent in February 2009,according to data compiled by Bloomberg. Swings in Standard &Poor’s GSCI gauge of 24 commodities dropped to 13.2 percent, thelowest in at least 10 years, from 56.9 percent in October 2009.

The falling volatility indicates investment opportunitiesmay have dimmed after the LME index of six primary metals morethan tripled in the 10 years to 2012. The “super cycle” ofcommodity price gains has ended as China’s economy shifts toslower growth and supplies increase, Citigroup Inc. said in aresearch report in November.

“This is something that should be expected when the globalmacroeconomic picture is less clear,” said Bonnie Liu, ananalyst with Macquarie Group Ltd. “Metals aren’t favored whenwe’re in risk-off mode.”

The 100-day historical volatility in LME three-month zincfell to 18.8 percent, the lowest since October 2003. The gaugeadvanced to as much as from as 60.9 percent in November 2008.That of nickel dropped to 21.5 percent on Feb. 15, the lowest inat least 10 years.

The Standard & Poor's GSCI gauge of 24 commodities gained0.3 percent last year, and closed at 675.63 yesterday aftersurging to 893.86 in July 2008. Copper climbed to a record$10,190 a metric ton on Feb. 15, 2011, and was at $8,071 a tonat 4:14 p.m. in Shanghai.

“The market is moving into a surplus from deficit, and itprobably won’t return to the record level,” Liu said.

The 100-day historical volatility in three-month tin fellto 21.9 percent yesterday, while that of lead dropped to 21.2percent on Feb. 15, both were the lowest since July 2005.