copper demand

Copper Caps Longest Slide Since May as London Stockpiles Climb
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By Anna Stablum and Millie Munshi

Dec. 10 (Bloomberg) -- Copper prices fell, capping the longest slide since mid-May, as surging inventories signaled slumping demand.

Stockpiles tracked by the London Metal Exchange have jumped 34 percent since Sept. 30. The dollar headed for the second straight weekly gain against a basket of six currencies, eroding the investment appeal of some raw materials. Commodity funds may get less new cash this week, researcher EPFR Global said.

“There’s a lot of money leaving the markets and heading to the sidelines,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. “People have also run into the dollar as a safe haven and are a little reluctant to buy commodities.”

Copper futures for March delivery fell 2.05 cents, or 0.7 percent, to $3.103 a pound on the Comex unit of the New York Mercantile Exchange. The price dropped for the sixth straight session, the longest slump since May 15. Earlier, the most- active contract touched $3.0815, the lowest price since Nov. 27.

Stockpiles of the metal in warehouses monitored by the LME rose 0.7 percent today to 461,625 metric tons, the highest since April 20 and the 29th straight increase. Canceled warrants, or metal set to be taken from the warehouses, slumped 33 percent to 700 tons, the lowest level in two years.

“It is an extremely low number and indicative of the physical market,” said Steve Hardcastle, an analyst at Sucden Financial Ltd. “We are in a run-down period to Christmas, so it is not surprising we are slowing down a bit.”

On the LME, copper for delivery in three months tumbled $135, or 1.9 percent, to $6,810 a ton ($3.09 a pound). Lead, nickel, aluminum and zinc also fell, while tin gained.

To contact the reporters on this story: Millie Munshi in New York at [email protected]; Anna Stablum in London at [email protected]