Copper Drops in London as Inventories Gain, Dollar Rebounds

SHANGHAI, Sept. 24 -- Copper prices fell for a second day in London as inventories rose and as the dollar rebounded, reducing demand for raw material investments.

    The dollar gained from a one-year low versus the euro as the Federal Reserve's decision to slow the pace of its asset purchases indicated the recovery in the world's largest economy won't be as robust as expected. Copper stockpiles in warehouses monitored by the London Metal Exchange increased to 331,950 metric tons, the most since May 22.

    "Copper is falling on a rebound in the dollar and the metal seems prone to more declines" after it failed to break new highs, analysts led by Tan Wentao at HNA Topwin Futures Co. said in an e-mailed report today.

    Copper for three-month delivery slid as much as 0.7 percent to $6,085 a ton on the London Metal Exchange and traded at $6,129.75 a ton at 10:18 a.m. in Beijing. December-delivery copper in Shanghai fell as much as 1.1 percent to 47,680 yuan ($6,983) a ton and last traded at 47,940 yuan.

    The euro fell from a one-year high versus the dollar amid speculation that global policy makers will discuss the rapid appreciation of the 16-nation currency at the forthcoming meeting of Group of 20 leaders. The euro last traded at $1.4733, falling from $1.4735 in New York yesterday, when it touched $1.4844, the strongest level since September 2008.

    Among other LME metals for three-month delivery, nickel declined 1.5 percent to $17,610 a ton, aluminum was 0.2 percent down at $1,869, lead retreated 0.9 percent to $2,220, zinc added 0.1 percent to $1,905. Tin hadn't traded as of 10:00 in Shanghai.

    (Source: Bloomberg)