Copper fell for a fifth straight session in London, reaching a six-year low, on signs that the market is oversupplied.
Production outstripped demand by 151,000 metric tons in the six months through June, the World Bureau of Metal Statistics said Wednesday. There was a supply surplus of 295,000 tons in 2014, the group estimates. Inventories tracked by the London Metal Exchange have more than doubled this year and are near the highest since January 2014.
“Everybody was thinking of a copper deficit this year,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a telephone interview. “Now that we’ve swung to a surplus, you’re going to see a price adjustment.”
Copper for delivery in three months declined 0.8 percent to settle at $4,995 a ton ($2.27 a pound) at 5:52 p.m. local time on the LME. Prices fell for a fifth session, the longest streak since July 27. Prices reached $4,976 on Wednesday, the lowest since 2009.
“We’re holding at this $5,000-a-ton level, and the market is trying to probe it to see if it gives way, and I think it eventually will,” Meir said.
On the Comex in New York, copper futures for December delivery slipped 0.4 percent to $2.2775 a pound.
The Bloomberg Industrial Metals Subindex has tumbled 21 percent this year amid concern that demand in China is sagging. The nation consumes about 40 percent of the world’s copper and half of aluminum.
Even if copper demand in China grows at 1 percent this year rather than falling, it would create “sizable surpluses until 2016, putting downward pressure on copper prices,” Barclays Plc analysts wrote in a note. Disappointing results in electrical infrastructure investment and the auto and consumer industries would probably lead to low growth, they said.
On the LME, aluminum, zinc, nickel, lead and tin rose.