Copper Drops in Asia as LME Stockpiles Rise to Four-Month High

SINGAPORE, Sept. 29 -- Copper declined in Asia after inventories increased, raising concern that demand may lag behind supply as Chinese processors and manufacturers prepare to shut for more than a week for the National Day holiday.

    Stockpiles tallied by the London Metal Exchange climbed to 344,350 metric tons yesterday, the highest level since May 19. Inventories are up 15 percent since the end of August, pushing copper prices toward the first monthly drop this year.

    "We're seeing reduced volumes as Chinese investors wind down ahead of the long holiday," said Yang Zhenqiang, an analyst at Yide Futures Brokerage Co. China's markets will be closed from Oct. 1 to Oct. 8.

    Three-month delivery copper in London fell as much as 1.4 percent to $5,925 a ton, and traded at $5,965 at 10:30 a.m. in Singapore, down 7.9 percent this month. December-delivery copper in New York slipped as much as 1.1 percent to $2.6965 a pound.

    "Growing inventories are a good excuse to take profit and close out long positions," Yang said from Tianjin, referring to bets that prices will advance.

    The December-delivery contract on the Shanghai Futures Exchange rose as much as 1 percent to 46,350 yuan ($6,788) a ton, before trading at 46,230 yuan.

    Commodities have also been "at the mercy" of the dollar recently, said Yang. The Dollar Index, which gauges the strength of the greenback against six major currencies, was little changed after rising as much as 0.6 percent yesterday.

    Among other LME-traded metals, aluminum and nickel were little changed at $1,830 a ton and $16,725 a ton respectively. Zinc fell 0.4 percent to $1,870 a ton, while lead and tin hadn't traded as of 9:51 a.m. in Singapore.

    (Source: Bloomberg)