BLBG: Copper Set for 2nd Weekly Loss on Metal Warehousing Probe
Copper reached a four-week low in London amid a probe into warehousing in China that analysts said might hold prices down. Nickel headed for the first back-to-back weekly drops since January.
The investigation of metals storage at China’s Qingdao port will make banks cautious about commodity financing, and any lending curbs might weigh on copper, according to Macquarie Group Ltd. Prices also slid before data projected to show U.S. employers continued to hire more than 200,000 workers a month. China and the U.S. are the two biggest global copper consumers.
“The ongoing investigation about the China Qingdao port is still impacting the metal,” Naeem Aslam, chief market analyst at Ava Capital Markets Ltd. in Dublin, said by e-mail. “The main focus for today will be the nonfarm payroll data. Positive data could certainly push the dollar higher, which could keep the pressure on the metal.”
Copper for delivery in three months fell 0.9 percent to $6,716 a metric ton by 10:42 a.m. on the London Metal Exchange after touching $6,714, the lowest since May 9. Futures for delivery in July lost 1 percent to $3.0595 a pound on the Comex in New York.
Nonfarm payrolls expanded by 215,000 workers in May, against April’s 288,000, a Bloomberg survey of economists showed. A stronger dollar tends to sap demand for commodities as an alternative investment. The Chinese port is assessing whether copper used as collateral for loans was counted more than once.
Chinese traders are selling copper in the physical market amid the Qingdao investigation and more metal will be released to the market next week, Shanghai-based consultancy SMM Information & Technology Co. said today.
Copper for immediate delivery cost $5 a ton more than the LME’s three-month contract today, the smallest gap since April 15, signaling better supply. Stockpiles of the metal tracked by the LME, down 54 percent this year to the lowest since August 2008, were little changed today at 167,775 tons, data showed.
Nickel for delivery in three months fell 0.6 percent to $18,918 a ton on the LME. Prices slid 1.7 percent this week after slumping 1.8 percent last week. Aluminum, zinc, lead and tin declined.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net Dan Weeks, Rachel Graham
