BLBG: Copper Declines Most in a Week as Japanese Carmakers May Suspend Activity
Copper fell the most in a week in New York on concern that Japanese carmakers may have to suspend production at plants in China, potentially curbing demand for industrial metals.
Japanese carmakers’ Chinese joint ventures face a rising possibility of output suspensions as parts suppliers such as Renesas Electronics Corp. are hampered by this month’s earthquake, said Nomura International Hong Kong Ltd. Copper also dropped as Morgan Stanley said swelling inventories of metal may reflect a lack of buying by China, the world’s biggest consumer.
“Copper is under pressure because people are concerned that automobile demand is on the low side, given what’s going on in Japan,” said Phil Streible, a senior strategist at Lind- Waldock, a broker in Chicago.
Copper futures for May delivery fell 5.15 cents, or 1.2 percent, to $4.3675 a pound at 10:04 a.m. on the Comex in New York. A close at that price would mark the biggest loss for a most-active contract since March 21.
With most assembly plants in Japan shut down for the past two weeks, lost auto production would amount to about 400,000 to 425,000 vehicles, Macquarie Bank Ltd. said today in a report. A car can contain as much as 28 kilograms (62 pounds) of copper, according to the Copper Development Association.
Copper inventories tracked by the London Metal Exchange rose for the third straight day to the highest level since July 6. Stockpiles are up 26 percent from the 2010 low on Dec. 10.
China may not be restocking copper “to the extent many had previously expected,” Morgan Stanley said in a report. Imports of refined copper into the country fell to a two-year low in February, customs figures showed last week.
On the LME, copper for three-month delivery dropped $108.75, or 1.1 percent, to $9,576.25 a metric ton ($4.34 a pound).
Aluminum, tin, zinc, lead and nickel also fell in London.
To contact the reporters on this story: Yi Tian in New York at ytian8@bloomberg.net; Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net
