BLBG: Copper Drops to Two-Week Low in Asia on Concern Demand Falling
Copper slumped in Asia to the lowest in two weeks as a jump in stockpiles raised speculation that demand is declining as a global economic crisis deepens.
London Metal Exchange-monitored inventories climbed 3,775 tons to 523,325 metric tons yesterday, the highest since Oct. 28, 2003. Imports of copper and alloys by China, the world’s largest consumer, fell 5 percent in January from the previous month, preliminary customs data showed today.
“Copper has entered a critical phrase and may start a slide to new lows as economic news points to grim fundamentals,” Tan Wentao, an analyst at HNA Topwin Futures Co., said in an e-mailed report today.
Copper for three-month delivery fell as much as 2.1 percent to $3,259.75 a ton on the London Metal Exchange, the lowest intra-day price since Feb. 3. The contract traded at $3,293 at 4:50 p.m. in Singapore.
May-delivery copper on the Shanghai Futures Exchange closed unchanged at 27,390 yuan ($4,004) at the same time.
China’s imports of copper and alloys were 201,822 tons last month, compared with 213,399 tons in December and 132,946 tons in January last year, Bloomberg data shows.
The country’s zinc exports plunged in January as stronger Chinese prices reduced the appeal of overseas sales. Exports of zinc and alloys fell 80 percent from December to 969 tons, the Beijing-based customs office said.
Zinc Gains
Slower zinc exports from China, the world’s largest producer, may help ease a global supply surplus, helping to support falling prices, said Li Jingyuan, an analyst at Haifu Futures Co.
Zinc for three-month delivery in London gained as much as 1.8 percent to $1,149 a ton, before trading at $1,125 at 4:24 p.m. Singapore time. May-delivery zinc in Shanghai closed up 1.3 percent at 10,380 yuan.
The zinc surplus expanded to 195,000 tons last year from 47,000 tons in 2007, according to the International Lead and Zinc Study Group yesterday. Zinc is used to rustproof steel.
Inventories of zinc in London Metal Exchange warehouses stood at 352,450 tons yesterday, nearly triple levels a year ago.
Among other LME-traded metals, aluminum fell 0.3 percent to $1,344 a ton, lead slid 0.4 percent to $1,140 and nickel lost 1.4 percent to $10,150 as of 4:22 p.m. in Singapore.
