Copper Pares Third Weekly Gain on Accelerating China CPI
Copper fell in London, almost erasing this week’s gain, after stronger-than-estimated Chinese inflation fueled concern officials may curb economic stimulus in the world’s biggest consumer of the metal.
Consumer prices gained 2.5 percent last month from a year earlier, China’s statistics bureau said today, against the 2.3 percent median estimate in a Bloomberg News survey of analysts. Copper also slid as stockpiles monitored by exchanges in London and Shanghai reached the highest levels since at least April.
Chinese authorities “don’t want unsustainable high growth rates with surging inflation,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e-mail today. “Hence monetary expansion and the ongoing stimulus will still be limited and very cautious.”
Copper for delivery in three months declined 0.3 percent to $8,088 a metric ton by 10:50 a.m. on the London Metal Exchange, compared with the close of $8,085 a week ago. Copper for delivery in March fell 0.8 percent to $3.6805 a pound on the Comex in New York.
“You need sustained good news coming out of China suggesting that we’re in the recovery phase now, and the same in the U.S., before we can trade above $8,100,” Jesper Dannesboe, an analyst at Societe Generale SA in London, said by phone. “The market has been long for some time already, so maybe it’s just consolidating a bit.”
Inventories of copper tracked by the LME advanced 1.2 percent to 330,450 tons, the highest level since Jan. 31, on deliveries in New Orleans and Antwerp, Belgium, daily exchange figures showed. That capped a 3.2 percent weekly expansion, the sixth in a row. Stockpiles monitored by the Shanghai Futures Exchange climbed to 209,096 tons, the highest level since April.
Orders to remove copper from LME warehouses fell 2.1 percent to 66,950 tons, rounding out a 6.5 percent weekly drop.
Aluminum and nickel rose in London, tin was unchanged, and zinc and lead retreated.
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