Copper declined, trimming the first weekly advance in three, as investors bet that tepid demand in China, the biggest user, will lead to a further rise of stockpiles and weigh down prices.
The metal for delivery in three months fell as much as 0.7 percent to $8,330 per metric ton on the London Metal Exchange, after rising 0.6 percent. The contract traded at $8,345.25 at 3:20 p.m. Shanghai time, and has gained 2.1 percent this week. May-delivery metal on the Comex in New York dropped 0.5 percent to $3.795 a pound.
“Fundamentals point to a further downside for copper,” Wang Ning, an analyst at Xiangyu Futures Co., said by phone from Shanghai. “With Chinese downstream fabricators’ operation rates at less than 65 percent and stockpiles climbing, the current price doesn’t have fundamental support.”
The Shanghai Futures Exchange will release weekly deliverable metals inventory data after the market closes. Stockpiles (SHFCCOPD) have increased since early December, climbing to 217,142 tons as of last week, nearly four times as much as those two months ago.
“Rumors are around that exchange stockpiles witnessed another jump this week,” said Shen Zhaoming, analyst at Changjiang Futures Co. May-delivery copper in Shanghai closed 1.3 percent lower at 59,620 yuan ($9,468) a ton.
A spokesman at Freeport-McMoRan Copper & Gold Inc. said the company was “experiencing work interruptions” in Indonesia as it tried to resume normal operations after a strike ended.
On the LME, aluminum fell 0.2 percent to $2,269 a ton, lead declined 0.6 percent to $2,153 a ton, and tin lost 1 percent to $23,950 a ton. Zinc and nickel were unchanged at $2,048 and $20,000 a ton, respectively.
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