Copper Resumes Slide Amid China Woes, Signs of Ample SuppliesLuzi Ann Javier
Copper posted a fourth drop in five sessions as a jump in stockpiles added to signs of ample supply amid slowing demand in China, the world’s biggest user.
Inventories tracked by the London Metal Exchange surged on Wednesday, extending gains to the highest since January 2014. China equities dropped as concern grew that government intervention is driving away investors. Copper pared gains from Tuesday as optimism faded that China’s plan for more stimulus would help spark rebounds for industrial metals.
“The path of least resistance seems to be down for copper because of oversupply,” Fain Shaffer, the president at Infinity Trading Corp. in Indianapolis, said in a telephone interview. “Demand has been waning. Concerns over China have copper on the defensive.”
Copper futures for September delivery fell 0.6 percent to settle at $2.3485 a pound at 1:31 p.m. on the Comex in New York. Price have declined for three straight months as China’s economy grows at the slowest pace this year since 1990.
On the LME, the metal for delivery in three months slid 1.1 percent to $5,178 a metric ton ($2.35 a pound).
The costs to treat and refine ore concentrate in China each climbed about 5 percent in July from a month earlier, the first gain in 10 months, Bloomberg Intelligence estimates. The fees usually rise when supply is outpacing demand.
“Some people are just concerned about China’s growth from here forward, and certainly there seems to be a lot of money coming out of China,” Shaffer said.
Money managers tripled net-short positions on copper last week, according to data from the LME.
Aluminum, lead, tin and zinc also fell in London. Nickel gained.
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