Shanghai Copper Falls on Concern China May Buy Less; Zinc Downadmin
Shanghai copper fell on concern that overseas purchases by China, the world’s biggest consumer of the metal, may slow following a surge in imports this year and growing domestic stockpiles.
China’s copper imports rose 61 percent to 1.1 million metric tons from January to April from year-ago levels. Shanghai Futures Exchange stockpiles are at their highest in three years, jumping 17 percent to 99,556 tons in the week to May 18.
“Copper imports are likely to ease back to more sustainable levels as stockpiles are replenished and refined production likely to build,” Gerard Burg, energy and minerals economist at National Australia Bank Ltd., said in a report today.
Copper for August delivery on the Shanghai Futures Exchange fell as much as 2,200 yuan, or 3.4 percent, to 61,920 yuan ($8,093) a ton. The contract closed at 62,220 yuan a ton, down 3 percent.
Metal for immediate delivery in Changjiang, Shanghai’s biggest cash market, fell by as much as 3 percent to 61,500 yuan a ton today.
The decline in Shanghai followed a drop in London Metal Exchange copper for delivery in three months by 2.1 percent yesterday, even as global stockpiles of the metal fell. Inventories of copper dropped 1,650 tons, or 1.2 percent, to 138,425 tons, according to the LME.
London Metal Exchange copper for delivery in three months fell 0.8 percent to $7,205 a ton at 3:03 p.m. Shanghai time.
NAB’s Burg revised his 2007 forecast of copper prices, up to $6,950 a ton from an earlier call of $6,308 a ton, “reflecting the sharp rebound in copper prices in March and April”.
Chile’s Codelco, the world’s biggest copper producer, began negotiating a wage contract early with workers at its Radomiro Tomic mine in a bid to reduce the risk of a strike, a union leader said yesterday.
The union at the mine in northern Chile began talks with management yesterday to renew a contract that ends July 31, said Ariel Rivero, the union’s secretary, in a telephone interview. Talks had been scheduled to start in June.
The mine accounts for about 17 percent of the 1.78 million tons produced last year at Codelco’s five fully owned mines.
Zinc for delivery in July in Shanghai fell 2.5 percent to close at 30,130 yuan a ton. Zinc for delivery in three months on the London Metal Exchange fell 0.8 percent to $3,680 a ton at 3:04 p.m. Shanghai time.
Shanghai aluminum for July delivery fell 0.5 percent to end at 19,880 yuan a ton. Aluminum on the LME fell 0.4 percent to $2,845 a ton at 3:05 p.m.
Information from: www.bloomberg.com