Copper declines on concern stockpiles may signal weaker demand
Tuesday, 23 March 2010
LONDON, March 22 (Bloomberg): Copper fell for a third day in London on concern that Chinese stockpiles at a seven-year high may signal weakening demand even as imports of metal increase.
Inventories in Shanghai warehouses climbed almost 9 per cent last week to the highest since at least 2003, figures released on March 19 showed. Inbound shipments of refined copper advanced 12 per cent to 220,530 metric tonnes in February, the Beijing-based customs office said today.
"It is a concern, because people at some point should be asking themselves if these imports are for real or if they are for stockpiling," Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said today by phone. "Demand for copper in China isn't as strong as the data shows."
Copper for delivery in three months fell $70, or 0.9 per cent, to $7,365 a tonne at 9:40 a.m. on the London Metal Exchange. The contract posted a second weekly drop in a row last week. Copper for May delivery slid 0.9 per cent to $3.3415 a pound on the Comex in New York.
All of the six main metals traded on the LME slid except tin. Mining companies including copper producer Xstrata Plc posted six of the 10 biggest declines in the U.K. benchmark FTSE 100 Index of shares.
Prices also retreated on concern Asian central banks may boost efforts to curb inflation, Weinberg said. India's central bank raised interest rates for the first time in almost two years on March 19, saying control of climbing prices was imperative after inflation accelerated to a 16-month high.
"It shows the market that at some point the central banks in Asia, concerned about inflation, will raise interest rates," Weinberg said.
Copper slid to a two-week low of $7,270 a tonne on March 15 on concern that borrowing costs might increase in China, where inflation also was at the highest in 16 months in February.
"We know that China will be raising interest rates this year, but the timing is unclear," Weinberg said.
Copper inventories monitored by the Shanghai exchange expanded 8.8 per cent to 169,101 tonnes last week. Stockpiles in LME-monitored warehouses fell today for a 14th day to 522,075 tonnes, the lowest level since Jan. 13.
China's imports last month of aluminum, lead, zinc and nickel all decreased from January, customs data showed. Shipments of primary aluminum and refined zinc plunged 52 per cent, lead tumbled 73 per cent and nickel dropped 25 per cent.
Zinc for three-month delivery on the LME fell 1.5 per cent to $2,260 a tonne and aluminum dropped 1 per cent to $2,236 a tonne. Nickel shed 1.3 per cent to $22,150 a tonne and lead declined 0.5 per cent to $2,185 a tonne. Tin had yet to trade after closing on March 19 at $17,650 a tonne.
Inventories in Shanghai warehouses climbed almost 9 per cent last week to the highest since at least 2003, figures released on March 19 showed. Inbound shipments of refined copper advanced 12 per cent to 220,530 metric tonnes in February, the Beijing-based customs office said today.
"It is a concern, because people at some point should be asking themselves if these imports are for real or if they are for stockpiling," Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said today by phone. "Demand for copper in China isn't as strong as the data shows."
Copper for delivery in three months fell $70, or 0.9 per cent, to $7,365 a tonne at 9:40 a.m. on the London Metal Exchange. The contract posted a second weekly drop in a row last week. Copper for May delivery slid 0.9 per cent to $3.3415 a pound on the Comex in New York.
All of the six main metals traded on the LME slid except tin. Mining companies including copper producer Xstrata Plc posted six of the 10 biggest declines in the U.K. benchmark FTSE 100 Index of shares.
Prices also retreated on concern Asian central banks may boost efforts to curb inflation, Weinberg said. India's central bank raised interest rates for the first time in almost two years on March 19, saying control of climbing prices was imperative after inflation accelerated to a 16-month high.
"It shows the market that at some point the central banks in Asia, concerned about inflation, will raise interest rates," Weinberg said.
Copper slid to a two-week low of $7,270 a tonne on March 15 on concern that borrowing costs might increase in China, where inflation also was at the highest in 16 months in February.
"We know that China will be raising interest rates this year, but the timing is unclear," Weinberg said.
Copper inventories monitored by the Shanghai exchange expanded 8.8 per cent to 169,101 tonnes last week. Stockpiles in LME-monitored warehouses fell today for a 14th day to 522,075 tonnes, the lowest level since Jan. 13.
China's imports last month of aluminum, lead, zinc and nickel all decreased from January, customs data showed. Shipments of primary aluminum and refined zinc plunged 52 per cent, lead tumbled 73 per cent and nickel dropped 25 per cent.
Zinc for three-month delivery on the LME fell 1.5 per cent to $2,260 a tonne and aluminum dropped 1 per cent to $2,236 a tonne. Nickel shed 1.3 per cent to $22,150 a tonne and lead declined 0.5 per cent to $2,185 a tonne. Tin had yet to trade after closing on March 19 at $17,650 a tonne.