Bloomberg News

Copper Falls for Fourth Time in Five Sessions on China Concerns

February 03, 2012

Feb. 2 (Bloomberg) -- Copper futures fell for the fourth time in five sessions in New York amid signs that demand may ease in China, the world’s biggest buyer of industrial metals. Lead and aluminum fell more than 3 percent in London.

House prices in China slid in January for the fifth straight month, SouFun Holdings Ltd., the nation’s largest owner of real-estate websites, said yesterday. The Copper Development Association says construction generates a quarter of demand for the metal. Copper premiums in Shanghai dropped below $100 a metric ton for the first time since August as inventories expand, suggesting imports that were at a record in December may ebb.

“The concern is that copper imports we saw recently aren’t likely to continue,” Jason Schenker, the president of Prestige Economics LLC in Austin, Texas, said in a telephone interview. “The question is whether imports were engendered by low prices and not high demand.”

Copper futures for March delivery declined 1.6 percent to settle at $3.781 a pound at 1:23 p.m. on the Comex in New York. The metal has dropped 17 percent in the past 12 months.

On the London Metal Exchange, copper for delivery in three months fell 1.1 percent to $8,345 a ton ($3.79 a pound). Aluminum slumped 3.1 percent, the most in three months, to $2,195 a ton.

Lead dropped 3.2 percent, the most in six weeks, to $2,164 a ton on the LME.

Copper premiums paid by Chinese importers over the London cash price were quoted as low as $90 a ton on a cost, insurance and freight basis to Shanghai this week, said Zhu Lin, an analyst at SMM Information & Technology Co., a data provider That compares with $120 a month earlier, the analyst said.

“As soon as you see those premiums start heading in the other direction, that is a very strong signal,” Nic Brown, the head of commoditiy research at Natixis Commodities Markets Ltd. in London, said in a telephone interview.

Zinc, tin and nickel also fell in London.

--Editors: Patrick McKiernan, Thomas Galatola

To contact the reporters on this story: Joe Richter in New York at jrichter1@bloomberg.net; Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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