Copper reversed gains and was poised for a fourth weekly drop as stockpiles surged and amid speculation that China needs to do more to stimulate its economy.
The metal fell as much as 0.3 percent after rising 0.5 percent. Inventories monitored by the London Metal Exchange have ballooned 92 percent in the past year, and on Thursday the hoard increased by the most since March, or 3.1 percent.
Copper’s recovery from an almost six-year low in January has faltered amid speculation that China needs to do more to stimulate growth. Goldman Sachs Group Inc. has said that its outlook for copper is among the most bearish for raw materials because the metal will fall as the dollar strengthens and demand from China’s construction industry wanes.
“Recent economic data show that China’s stimulus policies haven’t boosted physical demand much,” said Zhang Yu, an analyst at Yongan Futures Co. in Hangzhou. “Some Chinese investors have now lowered their expectations.”
Copper for delivery in three months on the LME fell 0.3 percent to $5,865 metric ton ($2.67 a pound) at 3:04 p.m. in Hong Kong and has dropped 8.5 percent in the past four weeks. On the Comex in New York, futures for July delivery declined 0.3 percent to $2.662 a pound, while in Shanghai, the contract for August retreated 1.7 percent to close at 42,490 yuan ($6,846) a ton.
— With assistance by Alfred Cang