BLBG:Copper Drops as High Stockpiles in China Signal Weaker Demand
Copper declined on concerns that high inventories in Shanghai won’t be absorbed any time soon amid slowing growth in the world’s second-largest economy. Zinc and nickel also fell.
Three-month copper on the London Metal Exchange lost as much as 0.6 percent to $8,520 a metric ton and traded at $8,531 by 1:49 p.m. Shanghai time. The June-delivery contract traded little changed at 60,250 yuan ($9,533) a ton on the Shanghai Futures Exchange.
“Domestic demand isn’t particularly bad, but the inventory level is too high,” Wang Ning, an analyst at Xiangyu Futures Co., said by phone from Shanghai.
Copper inventories at bonded warehouses in Shanghai climbed to 530,000 tons last week, according to the median estimate in a Bloomberg News survey of seven traders and analysts. This compares with about 200,000 tons in the fourth quarter, said Qu Yi, an analyst at CRU International Ltd.
May-delivery metal on the Comex dropped 0.6 percent to $3.8840 a pound.
On the LME, zinc fell 0.4 percent to $2,070 and nickel declined 0.4 percent to $18,979 a ton. Aluminum dropped 0.2 percent to $2,269.75 a ton and lead dropped 0.4 percent to $2,096.75 a ton. Tin was little changed at $23,600 a ton.
Metal is being moved within warehouses monitored by the London Metal Exchange, and “causing problems for copper,” said Michael Jansen, an analyst at JPMorgan Chase & Co.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
