Copper Declines as Economic Concerns Outweigh China Purchases

  • Nickel, lead, zinc prices also decline in London trading
  • China smelters may be stashing copper to sell later: BI

Copper Falls but What’s Impacting Demand?

Headwinds to global growth are exerting more influence on copper prices than China’s biggest purchase of the metal in 20 months.

Copper fell for the first time in three sessions as a slump in the value of China’s total imports added to concern that the economic slowdown will worsen demand in the country, the world’s biggest user of industrial metals. Concern that muted growth in Asia will be a drag on global expansion outweighed a 33 percent jump in the nation’s imports of copper and its products to 460,000 metric tons in September, from a month earlier.

“Any economic news about China certainly has an effect on copper,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “The China news is bearish for commodities in general.”

Copper for delivery in three months fell 0.8 percent to settle at $5,273 a ton ($2.39 a pound) at 5:50 p.m. on the London Metal Exchange. Nickel, lead and zinc also declined in London, while aluminum was unchanged. Tin rose.

On the Comex in New York, copper futures for December delivery slipped 1.2 percent to $2.3875 a pound.

While copper rebounded since late September as stockpiles tracked by the London Metal Exchange dropped, prices are still near a six-year low. Some Chinese smelters may be stashing metal away to sell at a later date and there’s no indication that demand is increasing, according to Bloomberg Intelligence analysts. Metal prices and mining companies have slumped this year as China’s economy expands at the slowest pace in a quarter of a century.

Codelco, the world’s biggest copper producer, is maintaining output targets and warning investors not to expect any dramatic changes to its record investment plans.

“The data is symptomatic of wider sentiment towards China," said Steve Hardcastle, head of client services for industrial commodities at Sucden Financial Ltd. in London. "There’s nothing in the numbers to change the prevailing view that China is slowing."

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