Farallon Resources Ltd. (fka FRLIF)

[the cork]

Zinc slips, Copper Drops for First Day in Five in London as China Demand Outlook Dims
By Glenys Sim - Nov 9, 2010 8:01 PM PT

Copper futures in London fell for the first day in five, declining from near a record as China’s imports of the metal slumped and on speculation that the Chinese government will step up measures to rein in asset prices.

Copper for three-month delivery on the London Metal Exchange was 1.3 percent lower at $8,753 a metric ton at 11:52 a.m. in Singapore after earlier falling to $8,740.50. The contract reached $8,884 a ton yesterday, the highest level since July 2008, when it reached an all-time high of $8,940.

“The drop in imports was expected as it was unprofitable to ship metal into China,” said Fang Junfeng, an analyst at China International Futures (Shanghai) Co. Traders are “nervous today ahead of the CPI number tomorrow and what the government will do to next to fight rising prices,” referring to the consumer price index by its initials.

December-delivery copper on the Comex in New York fell as much as 1.6 percent to $3.9780 a pound, while Shanghai futures dropped as much as 1.1 percent to 67,250 yuan ($10,131) a ton.

China imported 273,511 tons of copper and products in October, the customs office said today. This is 26 percent less than the previous month and 4 percent lower than October 2009. Government data due for release tomorrow will show the inflation rate rose 4 percent in October, according to the median estimate of 28 economists surveyed by Bloomberg. That would be the highest in two years.

China’s property sales climbed for a third month in October, according to the statistics bureau today, even as prices rose 8.6 percent from a year earlier, adding to speculation that the government will step up measures to cool the market.

“We’ll see some pullbacks along the way as it’s hard to justify these levels fundamentally,” said Yan Lei, an analyst at Guoyuan Securities Co., referring to copper. “The rally is driven by investment and speculative demand, which has increased because of the enormous amount of liquidity.”

Aluminum in London fell 0.8 percent to $2,450 a ton, zinc dropped 2.3 percent to $2,520 a ton, and lead declined 1.3 percent to $2,574.25 a ton. Nickel decreased 1.5 percent to $24,250 a ton, and tin slipped 1.1 percent to $27,050 a ton.

http://www.bloomberg.com/news/2010-11-10/copper-drops-for-first-day-in-five-in-london-as-china-demand-outlook-dims.html