By Glenys Sim Nov. 4 (Bloomberg) -- Shanghai copper futures fell after global stockpiles increased to the most in more than 4 1/2-years, raising concerns that demand is declining. Inventories monitored by the London Metal Exchange jumped 7,275 metric tons to 237,925 tons yesterday, the highest since March 2004. Prices also fell after manufacturing in China and the U.S., the world's two largest users, contracted last month as faltering economies eroded demand prospects. ``Concerns over the international economic outlook remain a depressing influence on base metals prices,'' David Moore, chief commodity strategist at Commonwealth Bank of Australia said in an e-mail today. ``As well, a large increase in LME copper stocks was a drag on the copper price.'' Copper for January delivery dropped 1.6 percent to 32,060 yuan ($4,687) a ton on the Shanghai Futures Exchange at 9:42 a.m. local time. The most-active contract earlier fell as much as 2.5 percent to 31,780 yuan. Copper for delivery in three months on the London Metal Exchange fell 0.2 percent to $4,080 a ton at the same time. ``Outside of China, the picture doesn't look good,'' Wang Xiaoli, an analyst at Goldbull Futures Co., said from Shenzhen today. ``However the large decline in Chinese stockpiles last week, as well as the premium of over 1,000 yuan for cash over futures these few days is lending support to prices.'' The premium of cash over benchmark futures rose to as high as 4,000 yuan a ton on Oct. 30, and stood at 1,530 yuan yesterday. An increase in the so-called backwardation, where the price for immediate delivery is more expensive than futures' prices, usually suggests near-term supply shortages. Stockpiles in China fell to 24,788 tons last week. Among other LME-traded metals, aluminum fell 0.7 percent to $2,034 a ton, and zinc was unchanged at $1,160 as of 9:46 a.m. in Singapore. Lead, nickel and tin had not traded. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

Source