- Copper stockpiles rise to highest level since February
- Zinc little changed after rising for eight consecutive days
Copper led losses in industrial metals after data showed the biggest two-day increase in stockpiles since 2004.
Copper slid 1.6 percent to $4,611.50 a metric ton as of 11:11 a.m. in London. Inventories in warehouses monitored by London Metal Exchange have risen almost 30 percent in two days, according to data compiled by the bourse. While stockpiles had fallen for most of this year, they’re now at the highest level since February.
"What possibly happened is that some inventories from Shanghai exchange moved to London, making the traders nervous," Dmitry Kolomytsyn, chief commodities strategist at Sberbank CIB, said by phone from Moscow.
Some metal poised for China may be diverted to the LME due to smaller premiums and price gaps between the bourses, while Chinese demand typically picks up in the second quarter, Citigroup Inc. analyst David Wilson said in April. Stockpiles monitored by the Shanghai bourse have fallen almost 50 percent since mid-March.
Commodities entered a bull market yesterday, ending a five-year rout, as supply constraints drove up prices in everything from soybeans to zinc. The asset class has outperformed bonds, currencies and equities so far in 2016. Citigroup Inc. said last month that commodities had turned a corner, increasing its forecasts for metals to grains amid an oil-led recovery.
Losses were smaller among the other LME metals, with lead and nickel sliding at least 0.3 percent. Zinc was little changed after an eight-day winning streak.
Base metals are still trading at "relatively low levels," Jens Naervig Pedersen, a senior analyst at Danske Bank in Copenhagen, said by e-mail. "Uncertainty over the outlook for global manufacturing is outweighing the positive effect of the lower dollar," he said.