Copper stockpiles in warehouses monitored by the London Metal Exchange fell 0.4 percent to 251,450 metric tons, data from the bourse showed.
Stockpiles, which dropped for a second day, have declined 2.2 percent in July, according to LME data on Bloomberg. Copper inventories monitored by the bourse fell 32 percent this year, with stockpiles having dropped in every month apart from June.
Canceled warrants, or orders to remove the metal from LME warehouses, have risen 91 percent in July to 53,225 tons, according to daily exchange data. The bourse accounts for about 80 percent of industrial metal futures.
Deliverable copper stocks at the Shanghai Futures Exchange have risen 15 percent since the start of July. Stockpiles are up 73 percent from the start of the year, according to bourse data. Overseas exchanges are prohibited from owning warehouses in the Asian country.
China’s increased raw material usage from fiscal stimulus will have to offset the stockbuilding in the first half of 2012 and the potential destocking in coming weeks, Bank of America Merrill Lynch said in a report e-mailed July 23.
“Taking these factors into account, we see scope for support to copper prices later this year, but a major rally is unlikely,” according to the report.
On the LME, copper prices are down 2.2 percent this year, making it the second best performer among the six industrial metals on the bourse after zinc. It rose 0.4 percent to $7,432 a ton by 3 p.m. in London.
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