LONDON — Copper hit a near two-week low on Wednesday as doubts about the global economic recovery renewed worries over metals demand.
Benchmark copper on the London Metal Exchange was down at $4,945 (U.S.) a tonne at 0957 GMT from Tuesday's close of $4,980.
The metal used in power and construction earlier dipped to $4,900, its weakest since June 5. Last week it hit an eight-month high of $5,388.
“Given what is still quite an unsteady world economy, to have prices where they got to last week was not sustainable,” David Thurtell, an analyst an Citigroup, said.
He added while copper demand from both consumers and investors had improved and LME stocks had fallen, the metal was still not a good buy at these levels.
LME data showed copper stocks held in its warehouses fell 1,875 tonnes to 283,175. That compares with levels around 500,000 in February and March. Cancelled warrants – stock already tagged for delivery – have also fallen to around 17,000 tonnes from levels near 55,000 tonnes in early March.
“We are no longer seeing these big outflows of metal from LME stocks and cancelled warrants are coming down quite sharply,” said Stephen Briggs, commodity strategist at RBS Global Banking and Markets.
He added stocks might even start rising over the coming months, which could mean downward pressure on copper prices.
Metals were also tracking the currency markets, with investors waiting for U.S. consumer price data due at 1230 GMT.
Aluminum fell to $1,590 a tonne from $1,610. Earlier the metal used in transport and packaging hit $1,584, its lowest since June 8.
“Ali stocks posted another big gain and I think that scared the whole market -- it didn't just hit ali, it hit everything,” Mr. Thurtell said.
Stocks of the metal in LME warehouses rose 36,800 tonnes to a record above 4.3 million tonnes. Aluminum has been battered this year by record stock levels and, more recently, by threats of production restarts in China.
Zinc fell to $1,551 a tonne from $1,569 on Tuesday, while battery material lead dropped to $1,644 from $1,650.
Analysts said lead is in a seasonally quiet period in terms of demand so the move lower is not entirely surprising.
Lead stocks rose 375 to 84,200, their highest since last August.
Tin fell to $15,195 a tonne from $15,375 while nickel dropped to $14,900 from $15,100.
