Copper futures fell on signs of ample supplies as inventories rose to the highest in at least nine years in China, the world’s biggest consumer of industrial metals.
Stockpiles monitored by the Shanghai Futures Exchange climbed 2.5 percent to 221,487 metric tons, the highest since at least January 2003, weekly data showed. The dollar’s rally against a basket of major currencies eroded the appeal of raw materials as alternative investment.
“Any sign that China is slowing is certainly going to weigh on commodities across the board,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The stronger dollar is also a factor.”
Copper futures for May delivery dropped 0.3 percent to $3.918 a pound at 11:05 a.m. on the Comex in New York. The price still headed for the second straight weekly gain. Before today, the metal climbed 14 percent this year.
“Builds in Chinese stocks reflect what is still a weak spot market currently, with consumers keeping buying to an absolute minimum due to uncertainty over future demand levels,” Gayle Berry, an analyst at Barclays Capital, said in a report.
Copper traders surveyed by Bloomberg were bullish on the outlook for a fourth straight week on speculation that global demand will increase. Inventories monitored by the London Metal Exchange inventories have dropped to the lowest since August 2009.
On the LME, copper for delivery in three months fell 0.4 percent to $8,592 a ton ($3.90 a pound).
Aluminum, zinc and nickel also fell in London. Tin and lead advanced.
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