Metals News
Copper Drops for First Day in Three in Shanghai on Inventories
smm insight
01:16PM
Dec 7,2009
Source:SMM

SINGAPORE, Nov. 10 -- Copper fell for the first time in three days in Shanghai as global inventories extended a climb, easing concerns that supply may not keep pace with demand.

    Inventories tallied by the London Metal Exchange expanded for a fifth day to a six-month high of 389,475 metric tons yesterday, while stockpiles monitored by Comex stood at 65,590 short tons yesterday, the highest since August 2004. Stockpiles of copper in Shanghai warehouses expanded 1,440 tons last week to 104,275 tons, the highest level since April 2004.

    "To date, the increase in exchange copper stocks has not proved to be as much of a drag on the copper price as we had anticipated, but does represent an ongoing source of downside risk," David Moore, commodity strategist at Commonwealth Bank of Australia, said in an e-mail today.

    February-delivery copper on the Shanghai Futures Exchange fell as much as 0.5 percent to 51,300 yuan ($7,514) a ton and traded at 51,350 yuan at 10:50 a.m. Singapore time.

    Copper for delivery in three months on the London Metal Exchange added as much as 0.6 percent to $6,578 a ton, before trading at $6,570, extending yesterday's 0.8 percent advance. The December-delivery contract on the Comex division of the New York Mercantile Exchange climbed 0.6 percent to $2.9830 a pound.

    Still, the increase in exchange copper stockpiles "is not unexpected," said Moore. "There is some seasonality to copper market balances and, therefore, copper surpluses. The market tends to be less tight in the second half," he added.

    A labor dispute at BHP Billiton Ltd.'s Spence copper mine in Chile helped limit the metal's losses. Workers walked out Oct. 13 after rejecting a wage offer and plan to stage a protest outside the company's office in Santiago tomorrow, a union official said yesterday.

    Among other LME-traded metals, zinc gained 1.1 percent to $2,183 a ton and nickel added 0.4 percent to $17,500 a ton. Aluminum fell 0.3 percent to $1,946.50 a ton, lead lost 0.7 percent to $2,285 a ton and tin dropped 0.6 percent to $14,665 a ton as of 10:55 a.m. in Singapore.

    (Source: Bloomberg)

 

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