Copper dropped for a fifth day on concern that a probe into inventories at Qingdao Port will reduce demand for the metal as collateral for credit in China, the world’s biggest user of the commodity.
The contract for delivery in three months on the London Metal Exchange retreated as much as 0.7 percent to $6,642 a metric ton and was at $6,662 at 4:14 p.m. in Tokyo. The metal fell 2.3 percent last week, touching $6,640 on June 6, the lowest intra-day level since May 8.
Qingdao Port is looking at whether there was multiple counting of some batches of copper used as collateral for loans, three people with direct knowledge of the investigation said last week. Chinese traders are selling copper holdings in the physical market amid the probe, and more metal will be released next week, Shanghai-based consultancy SMM Information & Technology Co. said June 6.
“Investors were very nervous to buy copper because of the Qingdao investigation,” said Kazuhiko Saito, an analyst at Fujitomi Co., a commodities broker in Tokyo. Dwindling stockpiles and indications of improvement in the Chinese and U.S. economies may limit further declines today, he said.
China’s exports rose more-than-estimated 7 percent last month, while imports fell, data showed yesterday. U.S. non-farm payrolls rose by 217,000 in May, exceeding the pre-recession peak.
Copper stockpiles tracked by exchanges in Shanghai, London and New York have dropped 47 percent this year to the lowest level since 2008.
In New York, futures for delivery in July slid 0.6 percent to $3.0315 a pound. The metal for delivery in August fell 1.8 percent to close at 47,370 yuan ($7,594) a ton on the Shanghai Futures Exchange.
On the LME, nickel and tin also dropped, while aluminum, zinc and lead advanced.