BLBG: Copper Declines in London on Stronger Dollar, Economic Outlook
Copper fell in London as the dollar strengthened and as traders speculated that economies may not rebound any time soon, sapping demand for raw materials. Aluminum, nickel and zinc also declined.
The Dollar Index, a measure against six counterparts, rose 0.8 percent, raising the cost of dollar-denominated commodities for holders of other currencies. Germany, Europe’s largest economy, today said exports and company spending plunged in the first quarter.
“Almost all the market-based indicators that we follow for copper point to near term pressure for the price of the red metal,” John Reade, a metals analyst at UBS AG in London, said in a report. Copper for delivery in three months fell $75, or 1.6 percent, to $4,535 a metric ton as of 9:59 a.m. on the London Metal Exchange. The contract rose 3.6 percent last week, its best performance since the 7 days ending April 17. Copper futures for July delivery fell 1.7 percent to $2.065 a pound on the Comex division of the New York Mercantile Exchange.
Copper traded in London has advanced 48 percent this year, with prices buoyed by China stockpiling metal. That’s left supply and demand “roughly in balance,” Adam Rowley, an analyst at Macquarie Group Ltd. in London, said in a report today. Without China, “the copper market would have been an absolute disaster,” he said.
China’s refined copper imports rose to 317,947 tons in April, more than double the figure for April 2008, the government’s figures showed on May 22.
Copper Inventories
Total inventories of copper in LME-monitored warehouses fell 2 percent to 326,575 tons today, for a 13th consecutive decline. Metal booked for delivery out of warehouses fell 9.9 percent to 47,625 tons.
Among other metals for delivery in three months, aluminum fell 0.1 percent to $1,440 a ton. LME-monitored inventories rose 0.3 percent to a record 4.2 million tons.
Nickel dropped 1.1 percent to $12,650 a ton and tin retreated 0.4 percent to $13,600 a ton. Lead dropped 3 percent to $1,396 a ton, while zinc declined 2 percent to $1,485. LME- monitored lead stocks added 0.8 percent to 75,100 tons and zinc stockpiles gained 1.6 percent to 322,775 tons.
