Most Base Metals Drop for Second Day on Rising SuppliesJae Hur
Most industrial metals fell after Rio Tinto Group said copper production is rising and Goldman Sachs Group Inc. forecast commodities will decline over the next five years on increasing supplies.
Copper for delivery in three months on the London Metal Exchange retreated as much as 0.5 percent to $7,042 a metric ton, the lowest price since July 2, and was at $7,049 by 3:13 p.m. in Hong Kong. The metal has lost 4.2 percent this year, the most among the six main metals on the bourse.
The LME index dropped 0.3 percent yesterday, paring this year’s gain to 3.3 percent. Copper will “grind lower” over the next six to 12 months, Goldman forecast yesterday, adding that global supplies will exceed demand by 385,000 tons in 2014, a third annual surplus. Rio Tinto boosted its full-year output forecast from mines by 2.6 percent.
“Copper was under downward pressure as supplies increased for nearby deliveries on the LME,” said Chae Un Soo, a metals trader at Korea Exchange Bank Futures Co. in Seoul. “There’s been selling after the metal failed to breach $7,200 in the past week.”
The metal for immediate delivery settled at $7.75 a ton lower than the benchmark three-month contract yesterday, the widest level since Dec. 3, signaling increased near-term supplies. LME stockpiles have risen 2.9 percent this month, set for the first such increase since June 2013.
In New York, futures for September delivery lost 0.2 percent to $3.2075 a pound, while copper for the same month slid 1 percent to close at 49,920 yuan ($8,048) a ton on the Shanghai Futures Exchange.
On the LME, zinc, nickel, tin and lead also fell, while aluminum rose.