July 26 (Bloomberg) -- Copper fell for a second day to pare a weekly advance as concerns that demand from China, the largest user, will decline outweighed the nation’s plans to eliminate obsolete production capacity.
Copper for delivery in three months fell 0.6 percent to $6,961 a metric ton on the London Metal Exchange at 3:02 p.m. in Shanghai. It has gained 0.7 percent this week. Metal for delivery in November on the Shanghai Futures Exchange dropped 0.9 percent to 50,040 yuan ($8,161) a ton.
Canceled warrants, or orders to remove copper from LME warehouses, fell to 316,625 tons yesterday, the lowest since June 21, while those in Asia slid to 194,925 tons, the lowest since June 24. China’s manufacturing weakened further in July, signaling the worst of slowdown has yet to be reached, a preliminary survey of purchasing managers showed July 24.
“Slow industrial activity continues to weigh on prices,” said Xiong Dabiao, an analyst at Minmetals Futures Co. in Shanghai. “It’ll take some time before the market can see why capacity elimination is different from previous efforts and won’t lead to further additions of new capacity,”
China’s industry ministry ordered more than 1,400 companies in 19 industries, including aluminum and copper, to cut production capacity this year, according to a statement on its website yesterday. Copper in London has earlier gained as much as 0.3 percent on the scale-down plan.
Metal for delivery in September on the Comex lost 0.8 percent to $3.1615 a pound. On the LME, zinc, lead and nickel also fell, while aluminum was little changed. Tin climbed.
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