BLBG: Copper Poised for Longest Slump Since July on Dollar’s Rebound
By Glenys Sim
Dec. 9 (Bloomberg) -- Copper fell for a fifth day in Asia, heading for the longest losing streak since July, as the dollar’s rally damped investor demand for raw materials.
The currency reached $1.4668 per euro today, the strongest level since Nov. 3, after Greece’s debt ranking was lowered by Fitch Ratings and as German industrial production unexpectedly shrank in October. Copper has more than doubled this year as the dollar has dropped 6.3 percent against a basket of six major counterparts.
“We continue to expect a pull-back in the copper price in the next three months, believing that the copper price is currently ahead of market fundamentals,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail.
Copper for delivery in three months on the London Metal Exchange fell as much as 1.5 percent to $6,875 a metric ton before trading at $6,880 at 3:19 p.m. Singapore time. The metal has fallen for the past five days, the longest slump since the five-day period ending July 8.
March-delivery copper on the Shanghai Futures Exchange lost as much as 2.4 percent to 54,500 yuan ($7,981) a ton before ending the day 2.2 percent lower at 54,620 yuan. March-delivery copper fell 0.9 percent to $3.1375 a pound on the Comex division of the New York Mercantile Exchange, slumping for a fifth day and heading for the longest decline since August.
The global recession has curbed demand for the metal used mainly in construction and automobiles, boosting London Metal Exchange stockpiles by 33 percent this year. Inventories expanded for a 26th day yesterday to 453,300 tons, while those in Shanghai warehouses stood at 104,710 tons last week, more than six times the level at the start of the year.
Among other LME-traded metals, aluminum fell 1.9 percent to $2,123 a ton, zinc dropped 1.6 percent to $2,290 a ton, and lead lost 1 percent to $2,266.50 a ton. Nickel slid 0.7 percent to $16,035 a ton, while tin hadn’t traded by 3:19 p.m. in Singapore.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
