Copper Drops for Second Day in London as Gains Seen Overdone

SHANGHAI, Feb. 23 -- Copper dropped for a second day in London, extending its decline from a four-week high, as investors viewed recent gains excessive amid rising stockpiles.

Copper for three-month delivery on the London Metal Exchange fell as much as 1.1 percent to $7,249 a metric ton and traded at $7,258 at 9:55 a.m. in Shanghai. The May-delivery contract on the Shanghai Futures Exchange decreased as much as 1.1 percent to 58,380 yuan ($8,551) a ton, and last traded at 58,480 yuan.

Global inventories of the metal monitored by exchanges in London, New York and Shanghai have climbed 4 percent this month to 766,752 tons yesterday, near their highest since 2004. Copper, used in homes and power grids, has climbed 7.2 percent in London in the same period.

"There is profit-taking pressure as copper seems to have gone up too fast," Li Jingyuan, an investment manager at Haitong Futures Co., said from Shanghai today. Profit-taking refers to the sale of contracts by investors wanting to cash in on rising prices.

Copper also dropped as a stronger dollar reduced the investment appeal of raw materials. The dollar climbed 0.1 percent to 80.544 on an index against six major currencies. The index reached 81.342 on Feb. 19, the highest level since June.

Aluminum in London was 0.4 percent up at $2,159 a ton, zinc fell 1.2 percent to $2,265, lead lost 0.4 percent to $2,316 a ton. Nickel and tin were yet to trade.