Copper, aluminium fall on LME stockpiles

Copper fell in London, along with aluminum and zinc, on speculation that a two-month rally left metals prices no longer reflecting the outlook for supply and demand.

The London Metal Exchange (LME) index tracking six industrial metals rose 26 per cent in January and February and copper climbed to a record March 6.

Refined copper and alloy imports by China, the world's largest user of the metal, fell 1.7 per cent in the first two months, the Beijing-based customs office said on Monday.

"You can never quite know how much of this price up here came from investment money rather than consumers," said Andrew McClelland, head of the industrial metals team at Sucden (UK) in London. "Nervousness and uncertainty has certainly increased."

Copper for delivery in three months fell $23.25, or 0.3 per cent, to $8,336.75 a tonne as of 9:42 am local time.

The contract earlier gained 1.9 per cent to $8,521 a tonne. It has increased 21 per cent this year.

Paul Touradji, founder of the $3.5 billion hedge fund Touradji Capital Management, told clients a "buying orgy" in commodities had inflated prices and increased risks of a collapse. His company invests in commodities ranging from copper, oil and corn, as well as shares of commodities-related companies.

"Commodities have all gone parabolically higher on frenzied money flow," New York-based Touradji wrote on March 10 in a letter to investors.

"Unless that money flow continues ad infinitum, in which case prices would go to infinity, the fundamentals had better be improving as quickly as prices have been otherwise there is nothing else to keep the markets at these levels."

Copper stockpiles on LME rose for the first time since February 25, expanding 275 tonnes, or 0.2 per cent, to 125,500 tonnes.

Including those monitored by the Shanghai Futures Exchange and the Comex division of the New York Mercantile Exchange, they stood at 198,139 tonnes, or 3.9 days of global consumption. The average was 4.9 days last year.

Comex copper for May delivery rose 4.3 cents, or 1.1 per cent, to $3.89 a pound in after-hours electronic trading.

Tin exports from China, the world's biggest producer and consumer of the metal, dropped to a record low of 3 tonnes in February after an export duty and the appreciating yuan reduced profit from overseas sales. They were 305 tonnes in January.

The February exports were the least ever shipped overseas, said research company Beijing Antaike Information Development.

Tin added $200 to $20,800 a tonne, below the record $20,900 traded on March 14. Nickel fell $50 to $32,500 a ton, and lead lost $4 to $3,080 a ton. Zinc fell $25 to $2,575.