Copper Futures Decline Amid Skepticism on China Demand Outlook

  • China's non-industrial copper use seen as overstated: BI
  • Market hasn't `seen that much physical interest': SG's Bhar

Copper futures slipped for a second session amid growing skepticism about demand in China, the largest user of the metal.

China’s non-industrial use of copper, mainly construction, has been overstated by about 15.5 million metric tons since 2011, according to a Bloomberg Intelligence analysis of property data. Inventories tracked by the Shanghai Futures Exchange are near a record. In the U.S., mortgage applications fell for a third straight week, according to data released on Wednesday by the Mortgage Bankers Association.

“Demand out of China is still questionable and certainly that’s one of the main drivers that had been sending copper lower,” Fain Shaffer, president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “Weak mortgage application numbers today also has the market lower.”

Copper futures for delivery in May declined 1.1 percent to settle at $2.19 a pound at 1:13 p.m. on the Comex in New York. On the London Metal Exchange, copper for delivery in three months fell 0.4 percent to $4,872.50 a metric ton ($2.21 a pound).

Weaker Demand

Premiums paid on copper imports by buyers in China have sunk, a signal of weaker demand.

“We haven’t seen that much physical interest,” said Robin Bhar, an analyst at Societe Generale SA in London. “Everything points to very subdued, very quiet conditions which I think is surprising because everybody thought there’d be a bit of a pick-up in interest after the Chinese New Year holidays. But it seems things are taking a little longer.”

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