Mar.8 (Bloomberg) --Copper, nickel and lead declined on concern that the conflict in Libya and political unrest in the Middle East may sustain the advance in oil prices, curbing the global economic recovery and hurting demand.
Three-month delivery copper fell 0.6 percent to $9,439.5 a metric ton on the London Metal Exchange, extending a 4 percent slump yesterday, the most since Nov. 16. Copper for May delivery in Shanghai tumbled as much as 4.3 percent to 71,050 yuan a ton ($10,820), the lowest since Feb. 24, and traded at 71,130 yuan.
Oil closed above $100 a barrel in New York most of this month on concern the Libyan violence would crimp Middle Eastern supplies.
Government warplanes repeatedly bombed rebel positions near the oil hub of Ras Lanuf, adding urgency to discussions among U.S. and allied governments about imposing a no-fly zone.
This kind of volatility is going to continue until the market has some clear sight on both oil price elevation and on how long the impact of this oil price is going to be,” Peter Richardson, chief metals economist at Morgan Stanley in Melbourne, said today by phone.
The market believes there will be a negative impact on growth from a period of sustained oil prices,” he said.
Copper has lost 1.6 percent this year. Prices more than trebled since the end of 2008. Stockpiles tracked by the exchanges in London, New York and Shanghai have climbed 16 percent since the end of last year to 660,456 tons, the highest level since July, according to Bloomberg data.
Imports by China last month probably fell 15 percent from January, and the recovery in demand may delayed until late March, said Dan Smith, an analyst at Standard Chartered Bank, in a report. Shipments probably fell to 210,000 tons, partly because of the Lunar New Year holiday and higher prices, he said.
Aluminum fell 0.1 percent at $2,555 a ton in London, while zinc increased 0.2 percent to $2,374 a ton. Lead dropped 0.8 percent to $2,560 a ton, nickel fell 1.1 percent at $27,179 a ton and tin dropped 2.4 percent to $30,000 a ton.