Copper Drops to Almost Three-Year Low on China ConcernsBloomberg News
Copper fell to the lowest level in 20 months as China’s stocks entered a bear market and inventories climbed. Aluminum had the longest run of declines in 26 years, while other industrial metals also dropped.
Copper for delivery in three months declined as much as 2.6 percent to $6,640.50 a metric ton on the London Metal Exchange, the lowest since October 2011, and was at $6,672.75 at 3:52 p.m. in Shanghai. Aluminum fell 0.7 percent, losing for the 13th straight day, the longest run of declines going back to 1987.
LME copper inventories rose 3.4 percent to 664,850 tons on June 21, the highest since July 2003, while those tallied by the Shanghai Futures Exchange climbed for a fourth week to 189,209 tons. China’s CSI 300 Index slid 22 percent from this year’s closing high amid concern lower liquidity will hurt growth in the world’s second-largest economy.
“A cash crunch led to a rather pessimistic view on China, the largest user,” Fang Junfeng, an analyst at Shanghai CIFCO Futures Co. China accounts for more than 40 percent of global copper consumption, according to Bloomberg Industry data.
Production at the Indonesian unit of Phoenix-based Freeport-McMoran Copper & Gold Inc. began gradually since June 22, spokeswoman Daisy Primayanti said today. Grasberg is the world’s second-biggest copper mine.
Metal for delivery in October on the SHFE closed 3.4 percent lower at 47,950 yuan ($7,810) a ton, while the September futures contract on the Comex in New York dropped 2.7 percent to $3.0150 per pound.
Net-short positions, or wagers on falling Comex prices, held by funds expanded to 29,018 futures and options as of June 18 from 18,722 a week earlier, according to the U.S. Commodity Futures Trading Commission.