Copper declined for a second day in London amid speculation that an earthquake in China’s Sichuan province will hurt demand for the metal in the near-term before it boosts consumption in the reconstruction.
Metal for delivery in three months fell as much as 1.5 percent to $6,888.75 a metric ton on the London Metal Exchange, before trading at $6,935.50 at 9:44 a.m. Shanghai time, headed for the lowest close since October 2011. Copper declined for a fifth consecutive week and dropped into a bear market. The August futures contract on the Shanghai Futures Exchange dropped 1.1 percent to 50,110 yuan ($8,107) a ton.
The death toll rose to 188 today with more than 11,500 injured after a magnitude 6.6 earthquake hit Lushan county on April 20. Coal mining infrastructure also suffered serious damage, according to Xinhua News Agency.
“The event adds to the negative sentiment for copper,” Lian Zheng, an analyst at Xinhu Futures Co., said by phone from Shanghai. “This may hurt demand first before it boosts consumption in reconstruction. Copper may head to test $6,500.”
Copper for delivery in July on the Comex fell 0.6 percent to $3.144 per pound. Net-short positions, or wagers on falling prices, held by funds dropped to 27,412 futures and options contracts as of April 16 from 32,850 a week earlier, according to the U.S. Commodity Futures Trading Commission.
On the LME, tin declined, while nickel gained. Aluminum, zinc and lead were little changed.
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