BLBG: Copper Leads Metals Lower in London as Recession Curbs Demand
Copper fell in London, leading most industrial metals lower, as shrinking economic growth curbs demand and expands stockpiles. Tin dropped to a two-year low.
Copper stockpiles monitored by the London Metal Exchange rose to 337,350 metric tons, the highest since February 2004. European retail sales fell for a seventh month in a row in December as the economic downturn deepened.
“The economic situation has weighed on prices,” said Eliane Tanner, an analyst at Credit Suisse Group in Zurich.
Copper for delivery in three months fell $28.50, or 0.9 percent, to $2,879.50 a ton as of 11:52 a.m. on the LME, taking this year’s drop to 57 percent. The metal traded at a record $8,940 July 2. Copper last posted an annual decline in 2001.
Industrial metals as measured by the LME index are heading for a second consecutive annual drop. The 162-member Bloomberg World Mining Index has plunged 61 percent this year, led by Katanga Mining Ltd. and Central African Mining & Exploration Co.
Copper for March delivery dropped 0.7 percent to $1.302 a pound on the Comex division of the New York Mercantile Exchange.
Japan’s economy will probably shrink at an annual 12.1 percent pace this quarter, the sharpest drop since 1974, as exports collapse, Barclays Capital said. The nation is the world’s second-largest consumer of nickel, after China.
China’s Yunnan Tin Co. and Yunnan Copper Industry Co. will start storing their production as part of the government’s initiative to aid metals producers. Expenses incurred during the stockpiling period will be funded by bank loans with the inventory as collateral, and by provincial government’s subsidies, Yunnan Copper said.
Inventories Climb
Tin output from Indonesia, the world’s biggest exporter, may fall 13 percent this year to 79,219 tons, the Energy and Mineral Resources Ministry said. The metal, mostly used in electronic soldering, rose $25, or 0.3 percent, to $9,800 a ton, paring this year’s loss to 40 percent.
LME aluminum inventories jumped 49,000 tons, or 2.2 percent, to 2.30 million tons, the highest since 1994. The metal fell $26, or 1.7 percent, to $1,485 a ton.
Zinc’s outlook “remains bleak” for the next 12 months, according to a Troika Dialog report today.
“With all the major zinc consuming industries like car manufacturing and construction suffering the worst decline in many decades, zinc prices are unlikely to show much vigor until the second half of 2009, if not 2010,” Moscow-based analyst Sergey Donskoy and Mikhail Stiskin said in the report.
Zinc declined $11 to $1,125 a ton, taking this year’s drop to 53 percent.
Among other LME-traded metals, nickel advanced $75, or 0.8 percent, to $9,775 a ton and lead fell $7, or 0.8 percent, to $912 a ton.
