Copper Snaps Three-Day Winning Streak on Seasonal Slowdown

BEIJING, July 23 -- Copper declined in Asia, snapping a three-day rally, on speculation demand will slacken in a seasonal slowdown in China, the world's largest user of the metal.

    China imported 378,943 metric tons of refined copper last month, a 12 percent increase from May and the fifth straight record, customs office data showed today. Demand should ease after builders filled orders for the summer construction peak and the margin between China and London prices narrowed, said Pang Ying, an analyst at Shenzhen Rongtuo Trading Co.

    "July imports should definitely come off from these record levels as the arbitrage window has closed and we move into the slow consumption season," Pang said in a telephone interview. "Demand in June was definitely weaker than in May, but comparable to June 2008 levels."

    Three-month copper on the London Metal Exchange fell as much as 1.1 percent to $5,339 a ton, and traded at $5,377 a ton at 3 p.m. in Singapore. The metal gained 2.7 percent in the past three days. Copper for September delivery in New York was little changed at $2.45 a pound at the same time.

    November-delivery copper on the Shanghai Futures Exchange ended the day down 0.4 percent at 43,000 yuan ($6,295) a ton, after rising as much as 1.4 percent to 43,790 yuan a ton earlier. Shanghai futures gained 80 percent this year, compared with the 76 percent increase in London prices the same period.

    Demand is steadying and some of June's imports will likely fill long-term contracts, Shenzhen Rongtuo's Pang said.

    "Domestic demand is not very optimistic now, and most imports were stockpiled in warehouses," Zhu Bin, president of futures research at Nanhua Futures Co., said by phone from Hangzhou today.

    Among other LME-traded metals, zinc dropped 0.9 percent to $1,640 a ton, lead slid 1.1 percent to $1,670 a ton, and nickel was down 1.2 percent to $15,760 a ton. Aluminum and tin were little changed at $1,712.50 a ton and $14,000 a ton respectively.

    (Source: Bloomberg)