Copper Heads for Biggest Decline Since May on Demand Concern

Copper fell in London, set for the biggest monthly decline since May, on further signs demand has yet to revive as stockpiles of the metal increase.

Japanese industrial production rose less in March than estimated by economists in a Bloomberg survey and South Korean output slid the most in a year, reports showed. U.S. economic growth last quarter was below projections, according to government figures last week. Copper inventories tracked by the London Metal Exchange climbed for a seventh month in a row.

“The market is still lacking confidence,” Andrew Silver, a broker at Triland Metals Ltd. in London, said by phone today. “There seems to be good supply around.”

Copper for delivery in three months declined 0.4 percent to $7,123 a metric ton by 11 a.m. on the LME. Prices are down 5.5 percent this month. Futures for delivery in July were little changed at $3.2255 a pound on the Comex in New York.

Futures trading volumes in New York were 35 percent lower than the average in the past 100 days for the time of day. Markets are closed through tomorrow for a national holiday in China, the world’s biggest consumer of copper.

“The physical business is quiet,” Silver said. “The volumes are lower because of China on holiday.”

Prices retreated as the euro dropped from a one-week high against the dollar amid speculation the European Central Bank will lower its key interest rate when policy makers meet in two days’ time. A stronger dollar reduces the appeal of commodities as an alternative investment.

Copper stockpiles monitored by the LME rose 0.2 percent to 618,600 tons, daily exchange figures showed, and expanded 8.6 percent in April. Inventories in Malaysia’s Johor advanced to 178,575 tons today, surpassing New Orleans as the biggest inventory of the metal.

Orders to remove copper from warehouses fell 2.1 percent to 160,100 tons, cutting this month’s jump to 75 percent.

Aluminum, zinc, nickel, lead and tin fell in London. Tin was set to be this month’s worst performer among the six main metals traded on the LME, sliding 10 percent.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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