BLBG: Copper Declines for Second Day as Rising Dollar Curbs Demand
By Anna Stablum and Millie Munshi
March 9 (Bloomberg) -- Copper prices fell for a second day as a rising dollar curbed demand for industrial metals as an alternative investment.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, rose as much as 0.5 percent. Some investors lose interest in riskier assets including commodities when the dollar gains. The Reuters/Jefferies CRB Index of 19 raw-material futures slipped as much as 1 percent.
“It’s all about the dollar today,” said Lannie Cohen, the president of Capitol Commodity Services Inc. in Indianapolis. “Everything else going on in the market is just noise.”
Copper futures for May delivery slid 2.25 cents, or 0.7 percent, to $3.388 a pound at 10:43 a.m. on the New York Mercantile Exchange’s Comex division. Yesterday, the metal declined 0.2 percent.
Prices also have fallen on concern that demand may decline in China, the world’s biggest metals user, Cohen said.
The country’s net imports of refined copper this year may fall 16 percent to 2.6 million metric tons this year, compared with 2009, said Zhou Qian, an analyst for CBI China Co.’s Shanghai Nonferrous Metals unit. Inventories monitored by the Shanghai Futures Exchange have surged 56 percent this year, a sign that the country may have ample supplies.
Demand from end-users in China may rise 14 percent this year to 7.55 million tons, with the increased consumption running down inventories, Zhou said at a conference in Nanjing today. He cited demand from builders, transportation industries, and appliance and electronics makers.
Last year, copper prices more than doubled after shipments to China climbed to a record in the first half as government spending surged to counter the effects of the global recession.
“The Chinese are not stopping their investment program,” Mark Heyhoe, a Hanson Westhouse Ltd. analyst in London, said by telephone. “That will support copper.”
On the London Metal Exchange, copper for three-month delivery slipped $5 to $7,465 a metric ton ($3.39 a pound). Aluminum and tin rose, while zinc, nickel and lead fell.
To contact the reporters on this story: Anna Stablum in London at astablum@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.
