Copper Falls to 2-Week Low on Signs of Demand Slowdown in China
2005-04-13 10:14 (New York)
By Claudia Carpenter
April 13 (Bloomberg) -- Copper prices in New York fell to a
two-week low on speculation demand may slow in China, the world's
biggest user of the metal.
China's copper consumption in the first quarter grew 2.1 from
a year earlier, Barclays Capital said in a report, citing
government figures. The International Copper Study Group said last
week China's demand grew 20 percent in January from a year earlier.
``China is trying to control the growth,'' said Lorne Kalisky,
president of Montreal-based Vican Trading Inc. ``It should be a
negative.''
Copper futures for May delivery fell 4.2 cents, or 2.8
percent, to $1.454 a pound at 10:12 a.m. on the Comex division of
the New York Mercantile Exchange after touching $1.443, the lowest
since March 24.
The drop below $1.45 may send prices down an additional 3
cents to 5 cents, Kalisky said. ``All we're seeing is the funds
liquidating,'' he said.
Hedge-fund managers and other large speculators increased
their net-long positions in copper futures, which are bets on
rising prices, in the week ended April 5, according to data from
the U.S. Commodity Futures Trading Commission on April 8.
Prices fell 1.9 percent yesterday after reaching a 16-year
high of $1.536 a pound on concern that a gain in the dollar against
the euro would spur selling by speculators.
A futures contract is an obligation to buy or sell a commodity
at a set price by a specific date. Copper futures are 13 percent
higher than this time last year.
In London, copper for delivery in three months fell $79, or
2.4 percent, to $3,188 a metric ton ($1.446 a pound).
China's Imports
China's net copper imports fell 13 percent in the first
quarter from a year earlier, Barclays Capital said in a report.
``Given the levels of industrial production in China this year and
anecdotal reports, this suggests a marked drawdown has occurred in
domestic inventories,'' Barclays said.
About 60,000 tons of copper is heading to China over the next
week with 30,000 tons arriving this week, Barclays said. Inventory
of metal tracked by the Shanghai Futures Exchange rose 36 percent
to 22,157 tons in the week ended April 7.
Prices on the Shanghai Futures Exchange fell 0.9 percent to
32,980 a ton ($1.81 a pound).
--Editor: McKiernan |
