Copper Drops to Lowest Price Since December as Imports Into China Tumble-Shanghai Metals Market

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Copper Drops to Lowest Price Since December as Imports Into China Tumble

Industry News 09:50:08AM Mar 11, 2011 Source:SMM

Mar.11 (Bloomberg) --Copper fell to the lowest in almost three months as imports slowed in China, the world’s biggest user, and amid rising concern that global growth may ease.

In February, China’s purchases of copper and products made from the metal tumbled 35 percent from a month earlier to the lowest in more than two years, customs figures showed today. The MSCI World (MXWO) Index of shares dropped the most since November, as Moody’s Investors Service cut Spain’s credit rating and U.S. jobless claims rose.

"The market is down for a number of things,” said Rick de los Reyes, who manages $700 million at T. Rowe Price Group Inc.’s Global Metals and Mining Fund in Baltimore. "We still have geopolitical concerns in the Middle East and northern Africa. Now, you’ve got the European sovereign-debt concerns coming back. On top of that, there’s a bit of weakness in the physical commodity market.”

Copper futures for May delivery dropped 1.5 cents, or 0.4 percent, to close at $4.1975 a pound at 1:21 p.m. on the Comex in New York.

Earlier, the price reached $4.136, the lowest for a most-active contract since Dec. 17. The industrial metal has fallen 9.9 percent since reaching a record $4.6575 on Feb. 15.

"The market has been waiting expectantly for signs of life in Chinese copper demand in the post-New Year period, but so far the signs are not good,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London.

Copper as Collateral

Most of the 550,000 metric tons of copper stockpiled in so-called bonded warehouses in Shanghai at the end of February was being used as collateral to obtain funds, Dan Smith, an analyst at Standard Chartered Plc, wrote in a report dated March 7.

"With more material available, trading firms have been diverting metal into finance deals and using copper as collateral,” Smith wrote.

Bonded warehouses are used to store shipments before duties are paid, and official data on levels of holdings aren’t issued.

On the London Metal Exchange, copper for delivery in three months slid $84, or 0.9 percent, to $9,191 a metric ton ($4.17 a pound).

Lead, tin and nickel also fell in London. Aluminum and zinc gained.
 

Copper Drops to Lowest Price Since December as Imports Into China Tumble

Industry News 09:50:08AM Mar 11, 2011 Source:SMM

Mar.11 (Bloomberg) --Copper fell to the lowest in almost three months as imports slowed in China, the world’s biggest user, and amid rising concern that global growth may ease.

In February, China’s purchases of copper and products made from the metal tumbled 35 percent from a month earlier to the lowest in more than two years, customs figures showed today. The MSCI World (MXWO) Index of shares dropped the most since November, as Moody’s Investors Service cut Spain’s credit rating and U.S. jobless claims rose.

"The market is down for a number of things,” said Rick de los Reyes, who manages $700 million at T. Rowe Price Group Inc.’s Global Metals and Mining Fund in Baltimore. "We still have geopolitical concerns in the Middle East and northern Africa. Now, you’ve got the European sovereign-debt concerns coming back. On top of that, there’s a bit of weakness in the physical commodity market.”

Copper futures for May delivery dropped 1.5 cents, or 0.4 percent, to close at $4.1975 a pound at 1:21 p.m. on the Comex in New York.

Earlier, the price reached $4.136, the lowest for a most-active contract since Dec. 17. The industrial metal has fallen 9.9 percent since reaching a record $4.6575 on Feb. 15.

"The market has been waiting expectantly for signs of life in Chinese copper demand in the post-New Year period, but so far the signs are not good,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London.

Copper as Collateral

Most of the 550,000 metric tons of copper stockpiled in so-called bonded warehouses in Shanghai at the end of February was being used as collateral to obtain funds, Dan Smith, an analyst at Standard Chartered Plc, wrote in a report dated March 7.

"With more material available, trading firms have been diverting metal into finance deals and using copper as collateral,” Smith wrote.

Bonded warehouses are used to store shipments before duties are paid, and official data on levels of holdings aren’t issued.

On the London Metal Exchange, copper for delivery in three months slid $84, or 0.9 percent, to $9,191 a metric ton ($4.17 a pound).

Lead, tin and nickel also fell in London. Aluminum and zinc gained.