SINGAPORE, Dec. 1 -- Copper may drop for the first time in three days on concern a recent rally was excessive amid rising global inventories and as the dollar advanced against the yen after the Bank of Japan said it will hold a policy meeting today.
Stockpiles of the metal in warehouses monitored by the London Metal Exchange climbed for a 20th day yesterday to 438,525 metric tons, the highest since April 23. Inventories have increased for 20 consecutive weeks. Still, copper has more than doubled this year while the Dollar Index has dropped 7.9 percent as investors bought raw materials as an alternative to a declining U.S. currency.
"Even though there are increasing signs of an economic recovery, prices have gotten ahead of the fundamentals for now," Yang Zhenqiang, First Futures Brokerage Co. analyst, said from Tianjin. "A large part of this is a result of the dollar's weakness."
Copper for delivery in three months on the London Metal Exchange traded little changed at $6,925 a ton at 10:33 a.m. in Singapore, after falling as much as 0.3 percent earlier. The metal climbed to a 14-month high of $7,060 on Nov. 26. The March-delivery contract slid 0.4 percent to $3.1630 a pound on the Comex division of the New York Mercantile Exchange.
March-delivery copper on the Shanghai Futures Exchange was little changed at 54,950 yuan ($8,049) a ton, after gaining as much as 1.1 percent to 55,430 yuan earlier.
China's manufacturing growth held at the fastest pace in 18 months in November, aiding the rebound of the world's third- biggest economy. The Purchasing Managers' Index was unchanged at a seasonally adjusted 55.2, the Federation of Logistics and Purchasing said today in an e-mailed statement in Beijing.
The dollar rose for the first day in six against the yen after the Bank of Japan said it will hold an emergency policy meeting today at 2 p.m. in Tokyo. It was at 87.07 yen from $86.41 in New York yesterday. The yen's surge to a 14-year high on Nov. 27 and renewed deflation may prompt Japanese Prime Minister Yukio Hatoyama to press the central bank to take further steps to support growth.
Among other LME-traded metals, aluminum was unchanged at $2,058 a ton, zinc fell 1.6 percent to $2,285 a ton, and lead lost 0.2 percent to $2,340 a ton. Nickel and tin hadn't trade by 10:36 a.m. in Singapore.