Copper falls nearly 2% on LMESource: AAP Date: 2007-Aug-02 07:48...

Copper falls nearly 2% on LME
Source: AAP
Date: 2007-Aug-02 07:48 AM

Copper fell nearly two per cent on the LME as concerns about a worsening credit crunch caused investors to flee from riskier assets like commodities.

Copper for delivery in three months on the London Metal Exchange ended down at $7,855 a tonne from Tuesday's close at $8,010, a resistance level the metal found difficult in July.

Copper recently has been supported by disruptions in key producing countries. But a strike is ending at the world's largest copper miner, Chile's Codelco, and another strike in Mexico is not expected to last.

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Nickel lost $625 to $30,775 a tonne, while lead added $25 to end at $3,130.

The metal used in batteries hit a record high of $3,500 a tonne on July 23, but has since slipped on profit-taking. But analysts said lead's fundamentals looked strong amid persistent problems with supplies from China and Australia.

Tin ended down $450 at $15,750 a tonne, a day after it set a record high of $16,600.

Aluminium shed $13 to $2,738 and zinc was untraded at the close, but quoted at $3,520/3,521 from $3,545 on Tuesday.

COMEX

A volatile stock market and credit worries pushed gold lower in New York last night, as selling pressure due to risk aversion in global financial markets continued to weigh on the precious metal.

Meanwhile, gold sales from European central banks could accelerate and hit the agreed annual limit of 500 tonnes, taking a toll on bullion investor sentiment, an analyst said.

Most-active gold for December delivery on the COMEX division of the New York Mercantile Exchange settled down $3.40 at $675.90 an ounce, dealing between $670.60 and $679.

Gold, traditionally seen as a safe haven for investors, has more recently been put in the same category as other commodities, which are considered riskier investments.

It is also less attractive when interest rates are rising as it is a zero-yielding asset.

In industry news, gold bullion imports to Turkey, one of the world's top consumers of the metal, jumped by 328 per cent year-on-year in July to 45.7 tonnes, the highest ever recorded in a month.

NYMEX

US crude oil futures ended more than two per cent lower last night as traders took profits after an unexpectedly large draw in crude stocks last week lifted intraday prices to a record.

Gasoline futures plunged five per cent before recouping some losses near the close while heating oil futures skidded more than three per cent, but also recovered slightly before the session ended.

On the New York Mercantile Exchange, September crude settled down $1.68 or 2.2 per cent at $76.53 a barrel, after dropping as low as $76.09, just above support at $76.

It surged in the morning to an intraday high of $78.77, surpassing the $78.40 peak hit on July 14, 2006, after release of the latest government inventory data.

The contract settled at $78.21 on Tuesday, a record, beating the previous high of $77.03 also hit on July 14, 2006.

In New York, September RBOB gasoline, settled down 7.63 cents or 3.6 per cent at $2.0296 a gallon, after trading from $2.0015 to $2.1066.

NYMEX September heating oil ended 5.38 cents lower or 2.5 per cent at $2.0694 a gallon, trading $2.0535 to $2.1210.

Crude stocks fell as imports dropped 213,000 barrels per day to 10.2 million bpd.

Domestic production rose 22,000 bpd to 5.2 million bpd.

Stocks at the Cushing, Oklahoma, delivery hub for NYMEX-traded crude fell 500,000 barrels to 20.7 million barrels, further tightening after hitting a record 28 million barrels in mid-April.

Gasoline stocks increased 600,000 barrels to 210.8 million barrels against forecasts for a 500,000 barrels in the poll.

Gasoline production rose 158,000 bpd to 9.4 million bpd while imports fell 427,000 bpd to 1.2 million bpd, limiting the stock build. Implied weekly demand fell slightly by 26,000 bpd to 9.66 million bpd.

Distillate stocks, which include heating oil and diesel fuel, rose 2.8 million barrels to 137.3 million barrels, much larger than the forecast for a 1.4 million barrel build.

Distillate production increased 194,000 bpd to 4.3 million barrels per day while imports rose 82,000 bpd to 339,000 bpd.

Implied weekly demand edged up 67,000 bpd to 4.11 million bpd.