China and US cop­per de­mand slows: so stock up, prices ease

The Weekend Australian - Travel - - Resources -

COP­PER prices have fallen for the sec­ond time in three days as ris­ing in­ven­to­ries of the metal sig­nal slow­ing de­mand in China and the US, the world’s two big­gest users.

In­ven­to­ries mon­i­tored by the Lon­don Metal Ex­change have jumped 13 per cent this month and have reached the high­est level since March 17. China re­ported this month that its cop­per im­ports dropped 19 per cent in the first quar­ter from a year ago. The price has dropped 12 per cent from a May 5 record.

Cop­per fu­tures for July de­liv­ery fell 3.35 cents, or 0.9 per cent, to $3.743 a pound on the Comex di­vi­sion of the New York Mer­can­tile Ex­change. In­ven­to­ries mon­i­tored by LME gained 2,300 tonnes, or 1.9 per cent, to 124,950 tonnes, the ex­change re­ported. The stock­piles are still 11 per cent smaller than a year ago.

Cop­per also fell on con­cern that ris­ing en­ergy prices will damp the global econ­omy and re­duce de­mand for met­als, traders said.

‘‘ There’s grow­ing con­cern about th­ese oil prices and their po­ten­tial to sti­fle the econ­omy,’’ said William O’Neill, a part­ner at Logic Ad­vi­sors in Up­per Sad­dle River, New Jer­sey.

Cop­per had jumped 24 per cent in 2008, partly boosted by spec­u­la­tion that sup­plies may fall short of con­sump­tion and that a de­clin­ing dol­lar would spur de­mand for com­modi­ties. The dol­lar fell as much as 0.6 per cent against a weighted bas­ket of the euro, yen and four other ma­jor cur­ren­cies. The gauge has dropped 5.6 per cent this year, help­ing to spur a jump in cop­per prices as traders seek a store of value.

‘‘ A weaker dol­lar helps cush­ion the sell­ing, but ris­ing LME stocks and lin­ger­ing soft­ness in nearby spot Chi­nese pre­mi­ums are caus­ing ral­lies to run out of steam,’’ said one trader.

World us­age of the metal was steady in the first two months of the year, ac­cord­ing to the Lis­bon-based In­ter­na­tional Cop­per Study Group. On the Lon­don Metal Ex­change, cop­per for de­liv­ery in three months fell $75, or 0.9 per cent, to $8,250 a tonne. Bloomberg

Cop­per: De­mand is slow­ing

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