April 22 (Bloomberg) -- Copper declined for a second day in London amid speculation that an earthquake in China’s Sichuan province will hurt demand for the metal in the near term before it boosts consumption in the reconstruction.
Metal for delivery in three months fell as much as 2.5 percent to $6,815 a metric ton on the London Metal Exchange, before trading at $6,847.25 at 3:10 p.m. Shanghai time, heading for the lowest close since October 2011. Copper declined for a fifth consecutive week and dropped into a bear market last week. The August contract on the Shanghai Futures Exchange retreated 3.3 percent to close at 49,040 yuan ($7,934) a ton.
The death toll rose to 188 today with more than 11,500 injured after a magnitude 6.6 earthquake hit Lushan county on April 20. Coal mining infrastructure also suffered serious damage, according to Xinhua News Agency. China’s stocks declined, with the benchmark Shanghai Composite Index fell 0.5 percent to 2,234.30.
“The event adds to the negative sentiment for copper,” Lian Zheng, an analyst at Xinhu Futures Co., said by phone from Shanghai. “This may hurt demand first before it boosts consumption in reconstruction. Copper may head to test $6,500.”
Copper for delivery in July on the Comex fell 1.9 percent to $3.103 per pound. Net-short positions, or wagers on falling prices, held by funds dropped to 27,412 futures and options contracts as of April 16 from 32,850 a week earlier, according to the U.S. Commodity Futures Trading Commission.
On the LME, aluminum, tin, zinc and nickel declined, while lead was little changed.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Brett Miller at email@example.com