Mar.29 (Bloomberg) --Copper fell the most in more than two weeks on concern that Japanese carmakers may suspend production at plants in China, curbing metals demand.
Suppliers of auto parts such as Renesas Electronics Corp. are hampered by this month’s earthquake, Nomura International Hong Kong Ltd. said. Copper also dropped as Morgan Stanley said swelling inventories of metal may reflect a lack of buying by China, the world’s biggest consumer.
"Copper is under pressure because people are concerned that automobile demand is on the low side, given what’s going on in Japan,” said Phil Streible, a senior strategist at Lind- Waldock, a broker in Chicago.
Copper futures for May delivery fell 6.9 cents, or 1.6 percent, to close at $4.35 a pound at 1:12 p.m. on the Comex in New York, the biggest loss for a most-active contract since March 9.
With most assembly plants in Japan shut down for the past two weeks, lost auto production would amount to about 400,000 to 425,000 vehicles, Macquarie Bank Ltd. said today in a report. A car can contain as much as 28 kilograms (62 pounds) of the metal, according to the Copper Development Association.
Inventories tracked by the London Metal Exchange rose for the third straight day to the highest since July 6. Stockpiles are up 26 percent from the 2010 low on Dec. 10.
China may not be restocking "to the extent many had previously expected,” Morgan Stanley said in a report. Imports of refined copper into the country fell to a two-year low in February, customs figures showed last week.
On the LME, copper for three-month delivery dropped $150, or 1.5 percent, to $9,535 a metric ton ($4.33 a pound).
Aluminum, tin, zinc, lead and nickel also fell in London.