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Copper, trading near the lowest price since August in New York, fell on concern demand shows few signs of reviving as stockpiles of the metal swell.
Figures on Wednesday would show US service industries, ranging from housing to retailing, expanded at a slower pace last month, economists surveyed by Bloomberg said. Manufacturing in the Euro zone shrank for a 20th month, according to a report yesterday. Copper inventories monitored by the London Metal Exchange are the highest since October 2003.
“Base metals are telling a story about global growth which is not reflected in US equity markets, for example,” Guy Wolf, a macro strategist at Marex Spectron Group in London, said by email. “There is limited physical demand and no shortage of supply. The rise in LME stocks is simply a reflection of this.”
Copper for delivery in May declined by 0.4 per cent to $3.3655 a pound by 7.49 a.m. on the Comex in New York. Prices on April 1 reached $3.34, the lowest since August 2. Copper for delivery in three months fell by 0.2 per cent to $7,448 a metric tonne on the LME.
The Standard & Poor’s 500 Index of US shares closed at a record high yesterday and is up 10 per cent this year, while the LME Index of the six main industrial metals traded in London has dropped by 6.8 per cent. The Institute for Supply Management’s US services index will come in at 55.5 for March, down from 56 in the prior month, the survey showed.
Copper inventories tracked by the LME rose for a 33rd session to 572,325 tonnes, daily exchange figures showed. Stocks monitored by the Shanghai Futures Exchange fell to 241,943 tonnes this week, according to figures on Wednesday. The Chinese market will be shut tomorrow and April 5 for national holidays.
Orders to remove copper from LME warehouses increased by 3.7 per cent to 120,975 tonnes. They jumped 87 per cent in the past week to the highest since February 2004. Zinc rose in London after reaching a 2013 low yesterday and lead gained from on Wednesday’s yearly low. The 14-day relative- strength index, indicating whether a commodity is overbought or oversold, is below 30 for both metals, a signal to some analysts that prices may rebound. Tin, nickel and aluminum slid.
“The selloff is now overdone,” Jesper Dannesboe, an analyst at Societe Generale SA in London, said by e-mail.
