Copper Declines to Four-Week Low in N.Y. as Inventories Climb By...

Copper Declines to Four-Week Low in N.Y. as Inventories Climb

By Millie Munshi

Oct. 18 (Bloomberg) -- Copper dropped to the lowest in four weeks as rising inventories signaled easing demand for the metal used in wires in pipes.

Stockpiles monitored by the London Metal Exchange rose 4,625 tons, or 3.2 percent, to 147,750 metric tons today, the highest since May 8. Copper dropped 2.4 percent in the previous two sessions, while inventories in London gained 2.5 percent.

``Any big increase in the stocks is really going to affect the market,'' said Michael Smith, president of T&K Futures & Options in Port Saint Lucie, Florida. ``The market's trying to price in concerns about falling demand.''

Copper futures for December delivery dropped 5.45 cents, or 1.5 percent, to $3.5415 a pound on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $3.528, the lowest since Sept. 19.

Copper will continue to fall on concerns that U.S. growth will slow, said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey.

The number of Americans filing first-time claims for unemployment benefits rose more than forecast last week, the Labor Department said today. The U.S. is the second-largest copper consumer after China.

Initial jobless claims climbed by 28,000, the biggest jump since February, to 337,000 in the week that ended Oct. 13. Economists had forecast claims would rise to 312,000, according to the median estimate of 42 responses to a Bloomberg survey.

`Some Weakness'

``I could see copper dropping another 10 to 15 cents from here,'' Goodis said. ``There's some weakness in the market.''

Still, demand from China, the world's fastest-growing major economy, may limit the metal's declines, traders said. Before today, rising consumption in China helped spur a rally that pushed the copper price up more than fourfold in the past four years.

Copper supply and demand are ``very favorable,'' Marius Kloppers, chief executive officer of BHP Billiton Ltd., the world's biggest mining company, said today.

Growth in China is five times more important than that of the U.S. for BHP, as each percentage point of economic expansion in the Asian nation accounts for a higher consumption of raw materials, Kloppers said.

China's refined copper imports in September jumped 66 percent from a year ago to 124,021 tons, the customs office said yesterday, citing preliminary data.

``Unless you can slow down growth in countries like China and India, demand for copper will still be fairly strong,'' Smith of T&K said.

On the LME, copper for delivery in three months fell $105, or 1.3 percent, to $7,860 a metric ton ($3.57 a pound). The metal has gained 24 percent.

To contact the reporter on the story: Millie Munshi in New York at [email protected] .

Last Updated: October 18, 2007 14:19 EDT