Metals - Copper falls on renewed growth concerns; rising inventories Fri, Nov 9 2007, 15:26 GMT http://www.afxnews.com
LONDON (Thomson Financial) - Copper fell on renewed worries slow US growth could hurt demand and as inventories continued to rise.
Meanwhile, the dollar came off record lows hit earlier this morning which stalled early buying.
Commodities across the board had benefited from more dollar-weakness early this morning, as it meant those trading in other currencies became cheaper. But, since the greenback picked up gold, oil and most metals have lost some value.
A worrying speech by US Federal Reserve chairman Ben Bernanke last night reignited fears of slower US growth, which the market fears could dampen metals demand in future.
Prices took a hit yesterday as he acknowledged a host of problems facing the economy, including a deeper-than-expected housing slump, a lingering credit crunch and the falling value of the dollar.
"The chairmans slow-growth forecast, if in fact correct, should bring metal prices under some pressure," said MF Global analyst Ed Meir.
Copper also suffered from two key reports today showing inventories rose, which markets see as a sign of weak demand.
The LME said stocks rose 1,900 tonnes to 172,775 tonnes, implying healthy inventories and weak demand while inventories in warehouses monitored by the Shanghai Futures Exchange rose 5 pct in the week ending yesterday, rising to 59,208 tonnes from 56,153 tonnes during the previous week.
In the short-term, however, the market will track a nationwide Peruvian workers strike which has the potential to hit mine output. While supply has not yet been hit, as mining companies have hauled in non-unionised workers, output could be hit the longer the protest goes on.
At 3.01 pm, LME copper for three-month delivery was trading at 7,008 from 7,210 usd per tonne, having hit a day-high of 7,255 usd this morning.
Lead, meanwhile, was up at 3,500 usd per tonne against 3,475 usd.
Among other metals, three-month nickel was lower at 32,350 usd per tonne against 32,800 usd and aluminium was higher at 2,622 usd per tonne against 2,630 usd at yesterday's close. Tin for delivery in three months flat at 16,800 usd, while zinc was lower at 2,710 usd per tonne from 2,775 usd.
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