Copper traded little changed near a six-month low in Asia as global stockpiles rose to the highest since February amid slow seasonal demand.
Copper inventories monitored by the London Metal Exchange climbed for an 18th day to 150,325 tonnes yesterday, the highest since February 15. The majority of gains were in South Korea, the closest LME-registered warehouse to China, according to Bloomberg data.
“LME inventories continue to build, with South Korea now seeing inflows, perhaps owing to slackening Chinese demand ahead of the Olympics,” Leon Westgate, an analyst at Standard Bank Group, wrote on Thursday in an e-mail.
Copper for delivery in three months was unchanged from yesterday’s close at $7,615 a tonne on the London Metal Exchange at 3:22 pm in Shanghai. It dropped to as low as $7,530 on August 5, the lowest since February 7.
The premium of the cash contract over three-month futures has fallen to around $150 a tonne, from as high as $241 on July 17. A decline in the so-called backwardation, where the price for immediate delivery is more expensive than futures’ prices, usually suggests an easing in near-term supply.
Copper for October delivery slipped 0.3 per cent to close at 59,540 yuan ($8,681) a tonne on the Shanghai Futures Exchange.
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Olympic closures
Closures of construction sites in Beijing to improve air quality for the Olympic Games may last two months, curbing demand for metals and steel, according to Shougang Corp, the nation’s ninth-largest steelmaker. Beijing began shutting sites at the start of July ahead of the games, which begin tomorrow.
A slide in metal prices during the “summer lull’’ has taken place amid relatively low volumes and as consumers in China, the US and Asia reduced inventories, Credit Suisse Group said. “The true test should come in September when we expect consumers to return to the market and restock,’’ analysts led by Jeremy Gray said in a report e-mailed yesterday. “If consumers stay away for the rest of the year, then clearly we are not at the bottom.’’
Among other LME-metals, aluminium was up 0.3 per cent at $2,916 a tonne, zinc rose to $1,777, lead advanced 1.2 per cent to $2,090, tin gained 0.6 per cent to $20,600 a tonne.