Copper futures declined in New York on speculation the 6.8 percent rally at the end of last week was overdone, given the outlook for surplus.
Refined metal production will exceed demand through 2015, Morgan Stanley said in a report today. Money managers increased bets that prices are heading lower for the first time in four weeks as of April 30, U.S. government data show.
“The copper market is now shifting from a long period of constrained mine supply to one in which new mine capacity growth brings about the long-awaited return of the refined market to moderate surpluses,” Morgan Stanley said. “Investor sentiment has deteriorated and price performance has been lackluster so far this year.”
Copper for July delivery fell 0.4 percent to $3.3015 a pound by 7:19 a.m. on Comex in New York. The 6.8 percent jump May 3 due to U.S. jobs growth was the most since October 2011.
Money managers had net-short positions, or wagers on falling prices, equal to 23,368 futures and options as of April 30, up from 15,727 a week earlier, U.S. Commodity Futures Trading Commission data released on May 3 show. The net-short positions had declined for the past three weeks.
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