Copper fell in New York on concern physical demand remains weak amid ample inventories of the metal and signs that work on new mines is proceeding.
Copper stockpiles monitored by the London Metal Exchange doubled since the end of September and those tracked by the Shanghai Futures Exchange are at a one-year high. Customers are “very careful” and ordering copper on short notice, according to Aurubis AG. Freeport-McMoRan Copper & Gold Inc. is pressing ahead with expansion projects.
“The market is still under pressure,” Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge Group SA in London, said by e-mail. “Funds have been selling across the board. The expected physical buying from China after the New Year holiday has not shown up,” he said, referring to February’s weeklong Lunar New Year celebration.
Copper for delivery in May declined 0.3 percent to $3.5045 a pound by 7:23 a.m. on the Comex in New York. The metal for delivery in three months fell 0.6 percent to $7,728 a metric ton on the LME.
Prices increased in the prior two sessions even after the government in China, the world’s biggest copper user, called for higher down payments for second-home mortgages in some cities. The Copper Development Association says building generates about 40 percent of demand for the metal. The Dow Jones Industrial Average of U.S. equities rose to a record yesterday.
“Nervousness over new China clampdowns on property investment has seen a retreat from copper,” Mark Newson-Smith, head of sales at XConnect Trading Ltd. in London, said by e-mail today. He cited “a suspicion that Dow strength in particular is displaying the beginnings of an asset bubble” as funds flow into shares from metals.
Copper stockpiles monitored by the LME, up 48 percent this year to the highest level since October 2011, rose 0.2 percent to 473,750 tons, daily exchange figures showed. Orders to remove the metal from warehouses, down 55 percent in 2013 to the lowest since last June, fell 6.6 percent to 23,025 tons.
Lead, aluminum, zinc and nickel slid in London. Tin was little changed.
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