LONDON — Copper fell 5 per cent on Tuesday on a stronger U.S. dollar and as a jump in inventories added to concerns about demand.
“Demand has vanished. Supplies are still growing as evidenced by the inventory accumulation so there is more pain to come,” said Robin Bhar, an analyst at Calyon.
Copper dragged all the industrial metals lower, with aluminum and nickel down around 4 per cent.
Three-month copper on the London Metal Exchange was at $3,265 (U.S.) a tonne at 1107 GMT compared with Monday's close of $3,430. Prices fell 5.0 per cent to a low of $3,259.50 a tonne.
Copper inventories in LME warehouses jumped 15,425 tonnes, the biggest one-day jump since Sept. 4, to a five-year high of 409,100 tonnes.
The stronger dollar, which makes metals more expensive to holders of other currencies, and weaker oil prices also pressured prices.
Lower oil prices are an indication of weak demand for any commodity, Mr. Bhar said.
Oil extended losses towards $33 a barrel on Tuesday, after Russia and Ukraine agreed on a gas deal that would help secure supplies to Europe, while no improvement was in sight for oil demand.
Aluminum traded at $1,385 from $1,424 a tonne. It earlier fell 3.8 per cent to $1,370 a tonne, the lowest price since July 2003, as inventories continued to climb.
Aluminum stocks in LME warehouses rose 15,325 tonnes to 2.55 million tonnes, edging closer to the record high of 2.66 million in June 1994.
Lead fell to a low of $1,136 from $1,175.
Lead stocks on the LME gained 4,175 tonnes to 49,700 tonnes, the highest level since October 2008 and the biggest one-day surge since June last year.
Nickel fell as much as 4.2 per cent to $10,830, zinc fell 4.6 per cent to a low of $1,202, while tin fell 3.8 per cent to $10,725.
