Copper Falls on Speculation About Chinese Imports; Lead Drops
By Anna Stablum
March 11 (Bloomberg) -- Copper fell on the London Metal Exchange on speculation Chinese imports of the metal will be too small to compensate for slumping demand elsewhere. Lead and zinc also dropped.
Expectations of Chinese purchases have helped copper to gain 20 percent on the LME in 2009. The country’s copper imports rose to a record in February as buyers took advantage of low prices to rebuild stockpiles, the Beijing-based customs office said today. Some investors were selling at current prices, Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by telephone.
“There is Chinese restocking supporting prices right now,” said Weinberg. Still, “the Chinese purchases will not be long- lasting,” he said.
Copper for delivery in three months fell $36, or 1 percent, to $3,684 a metric ton at 11:05 a.m. local time, rebounding from a drop of as much as 2 percent. The contract reached $3,785.25 a ton, the highest intraday price since Nov. 27, on March 6 on speculation China would add to state reserves.
“I wouldn’t be surprised if the market turns positive today on short-term positive signs of Chinese demand,” Weinberg said.
Inbound shipments advanced 42 percent from January to 329,311 tons, the customs office said. That’s the highest since at least 2003, according to data compiled by Bloomberg.
No Respite
Demand for copper, used in the construction and power industries, has plunged because of the world economic slowdown. Investors expect no respite for now from the downturn, Barclays Capital said, citing a survey from a conference last week.
“While 37 percent expect a U-shaped recovery for the global economy, 34 percent expect very little pickup at all and believe an L-shape to be the most likely representation of global growth trends for the foreseeable future,” the bank said.
Investors remain positive about commodities over the so- called longer term, said Barclays. The Reuters/Jefferies CRB Index of 19 commodities has lost 9.5 percent this year following 2008’s 36 percent plunge.
Copper inventories monitored by the LME shrank 2 percent to 501,875 tons today, falling for a 10th day in a row. Stockpiles are down about 8.5 percent since Feb. 25. Canceled warrants, representing metal scheduled to be removed from warehouses, were 40,825 tons.
“Copper remains the metal with the best fundamentals,” Andrew Keen, an analyst at Sanford C. Bernstein in London, wrote in a research report.
Three-month aluminum rose $26, or 2 percent, to $1,352 a ton. LME-monitored stockpiles of the lightweight metal, used in industries from packaging to aerospace, increased to a record 3.28 million tons and have more than tripled in a year.
Lead declined $6, or 0.5 percent, to $1,288 a ton, erasing a gain of as much as 0.9 percent to $1,305, the highest intraday price since Nov. 19. The metal, mainly used in vehicle batteries, has added 29 percent this year, the most among the six main metals traded on the LME.
Three-month tin fell 1.8 percent to $10,900 a ton. Zinc shed 1.2 percent to $1,250 a ton, and nickel dropped 0.7 percent to $9,870 a ton.
To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net.
Last Updated: March 11, 2009 07:09 EDT
