BLBG: Copper Drops in London Trade as Stronger Dollar Deters Demand
Copper fell in London as a stronger dollar deterred demand and some investors took advantage of the metal’s longest winning streak in a year to lock in gains.
The Dollar Index, a measure against six counterpart currencies, rose for a fifth consecutive day, making dollar- denominated commodities more costly for those holding other monies. The MSCI World Index of shares fell for the first time in four trading sessions.
“The markets are just going to track equities and the dollar,” David Thurtell, an analyst at Citigroup Inc. in London, said by phone. Weaker equities are a reflection of the economic outlook and demand for industrial metals, he said.
Copper for delivery in three months fell $73.25, or 1.5 percent, to $4,731.75 a metric ton by 9:45 a.m. on the London Metal Exchange. The metal, used in wires and pipes, reached $4,925 on April 14, the highest since Oct. 20, and posted five consecutive weekly advances, the best run since March 2008.
Stockpiles in warehouses monitored by the London Metal Exchange fell 1.6 percent to 462,325 tons. Canceled warrants, reflecting metal to be taken out of storage, rose 6.1 percent.
Hedge-fund managers and other large speculators increased their net-short position in New York copper futures by 8 percent in the week ended April 14, according to U.S. Commodity Futures Trading Commission data. Speculative short positions, or bets prices will decline, exceeded long positions by 18,861 contracts on the Comex division of the New York Mercantile Exchange.
Copper for July delivery in New York fell 1.6 percent to $2.163 a pound.
Zinc Declines
Among other metals for delivery in three months in London, lead fell 2.3 percent to $1,520 a ton and zinc shed 2.5 percent to $1,518. Aluminum declined 0.8 percent at $1,474. Tin gained 1.2 percent to $12,400 a ton.
Nickel fell $275, or 2.1 percent, to $12,550 a ton. The metal, with more than half of the world’s output used in stainless steel, gained 16 percent last week.
Cia. Vale do Rio Doce on April 16 said it is postponing for the second time the start-up of a northern Brazil nickel project, and will further cut nickel output in Canada because of slowing global demand.
