Dec 16 (Bloomberg) -- Copper declined for a third day as stockpiles expanded and renewed concern that Europe’s debt crisis may hamper the global economic recovery hurt the outlook for demand. Futures in Shanghai and New York also fell.
Three-month-delivery copper on the London Metal Exchange dropped as much as 1 percent to $9,005 a metric ton, and traded at $9,045 at 2:45 p.m. in Singapore. Copper, which reached a record $9,267.50 a ton on Dec. 14, is still up 0.6 percent this week. Lead and nickel also dropped.
The sovereign-debt issues in Europe "continue to be a cloud that hangs over investors’ heads,” Ni Yaoxiang, chief analyst at Sinolink Futures Co., said from Shanghai. "Copper rallied to a record despite signs of slowing demand at the moment, so a bit of profit-taking is normal,” Ni said.
Inventories of copper tallied by the London Metal Exchange rose for a third day yesterday by 7,050 tons, the largest one- day tonnage increase since January, to 357,950 tons. Of that amount, about 84 percent entered LME warehouses in South Korea, the nearest location to China, the world’s largest metal user.
"It’s probably metal being re-routed from China because importers can’t make money bringing it in,” said Zhu Lin, an analyst at Shanghai Metals Market.
The metal for March-delivery on the Shanghai Futures Exchange lost as much as 1.4 percent to 66,920 yuan ($10,045) a ton, while futures on the Comex in New York dropped as much as 0.9 percent to $4.0960 a pound.
Moody’s Investors Service said yesterday that Spain’s rating may be cut from Aa1, amid growing concern it could follow Greece and Ireland in seeking a bailout.
"The potential for further tightening in China” was also weighing on investors, said Li at Sinolink Futures. Policy makers in China have said they may curb lending and raise interest rates to stem accelerating inflation.
Aluminum in London was little changed at $2,319.75 a ton, while zinc gained 0.4 percent to $2,267 a ton. Lead declined 0.6 percent to $2,410 a ton, nickel lost 0.8 percent to $24,350 a ton, and tin rose 0.3 percent to $25,900 a ton.