BLBG: Copper Prices Fall Most in a Week in N.Y. as Stockpiles Climb
By Millie Munshi and Anna Stablum
Nov. 5 (Bloomberg) -- Copper prices fell by the most in almost a week as rising stockpiles fueled concern that demand is waning for the metal used in pipes and wires.
Stockpiles monitored by the London Metal Exchange jumped 1.5 percent to 379,825 metric tons today, the highest level since May 11 and the biggest one-day advance in six weeks. The gain was “sizeable,” said Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut. Copper prices dropped 2.6 percent last week on concern consumption may falter.
“There’s some uncertainty about future demand,” said Patrick Chidley, a Barnard Jacobs Mellet LLC analyst in New York. “People are seeing this as an opportunity to take some profit.”
Copper futures for December delivery lost 2.6 cents, or 0.9 percent, to $2.967 a pound at 9:55 a.m. on the New York Mercantile Exchange’s Comex unit. A close at that price would be the biggest decline for a most-active contract since Oct. 30.
“We are still wary about metals at this point,” Meir said today in a report. Copper has “uninspiring fundamentals, typified by patchy demand and rising LME stocks.”
Copper prices have more than doubled this year as Chinese imports surged. Inventories at warehouses monitored by the Shanghai Futures Exchange have soared 62 percent since Aug. 1, raising concern that demand from the Asian nation is slowing.
Mine Strikes
Concern that supply is being constrained has “sustained prices at current levels, despite an expectation for a softening in Chinese import demand,” Nicholas Snowdon, an analyst at Barclays Capital in London, said in a report.
The combined annual capacity at copper mines where labor negotiations are being held this year is 1.2 million tons, said Daniel Major, an analyst at RBS Global Banking & Markets in London.
“There is potential strike action at Antamina, which could be supportive in coming days,” he said, referring to Cia. Minera Antamina SA. The Lima-based company operates the world’s largest combined copper and zinc mine.
Antamina, owned by BHP Billiton Ltd., Xstrata Plc, Teck Cominco Ltd. and Mitsubishi Corp., said yesterday it’s interested in reaching a “reasonable agreement” with the workers union. The company said it has a “contingency” plan in case labor talks break down.
The mine is expected to produce 335,000 tons of copper this year, or 2.2 percent of global supply, according to RBS.
Copper for three-month delivery fell $56.75, or 0.9 percent, to $6,518.25 a metric ton ($2.957 a pound) on the London Metal Exchange.
Among other LME metals for three-month delivery, aluminum, zinc, tin, lead and nickel prices also dropped.
To contact the reporters on this story: Anna Stablum in London at astablum@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.
