Copper Falls From Seven-Month High on Slowing Chinese Imports
By Chanyaporn Chanjaroen and Brett Foley
bloomberg.com
April 12 (Bloomberg) -- Copper fell from a seven-month high in London on speculation imports of the metal into China, the world's biggest user, may slow.
China may cut copper imports by as much as half in the second quarter due to high prices and growing domestic stockpiles, traders and analysts, including Li Zhifeng at China Minmetals Nonferrous Metals Co., said today. Refined copper and alloy imports may drop to 100,000 metric tons a month in this quarter from an estimated 190,000 tons in March, Xue Feng, an analyst at Maike Futures Co., said today.
``There are already signs of Chinese imports slowing in the second quarter and they have been the major driver of the price in recent months,'' Michael Widmer, head of metal research at Calyon in London, said today by phone. ``Copper producers are saying business in China is not as brisk now as it was earlier this year.''
Copper for delivery in three months on the LME fell $70, or 0.9 percent, to $7,760 a metric ton as of 3:45 p.m. London time. Earlier, the contract rose as much as 1.8 percent to $7,970, the highest since Sept. 8.
The metal has gained 25 percent this year as rising Chinese imports drained inventories. Stockpiles monitored by the LME have fallen 4 percent this year to the lowest in almost three months. They fell for a fourth day today, dropping 950 tons to 174,500 tons, the lowest since Dec. 19 and equal to less than four days of global consumption.
Chinese imports of copper and copper products rose 61 percent to 307,740 tons in March from a year ago, the customs office said on April 10, following gains in January and February.
Codelco Dispute
Copper rose earlier after workers at Codelco, the world's biggest producer of the metal, blocked the entrance to the company's largest mine following a labor dispute yesterday.
About 20 employees used their cars yesterday to prevent traffic from entering the Chuquicamata copper mine in northern Chile, said Miguel Lopez, a director at Workers' Union No. 3 at the mine. The protest slowed output, the union said. Codelco said yesterday that production was unchanged.
``The market is very nervous and the Codelco blockade caused prices to rise,'' Kevin Tuohy, a trader at Man Financial Ltd. in London, said by telephone. Man is among the 11 companies that trade on the floor of the London Metal Exchange.
Codelco workers' productivity bonuses are being reduced because of management mistakes at the mine, and there are still outstanding issues from a new contract agreement in December, Lopez said. The state-owned company and its workers are already discussing those issues, the company said yesterday in a statement.
Chuquicamata produced about 641,000 tons of copper in 2006, or 38 percent of Codelco's overall production of 1.68 million tons that year, according to the Chilean Copper Commission.
Stainless Steel
Nickel fell $801, or 1.7 percent, to $46,099 a ton. The metal, used in stainless steel, traded at a record $50,150 on April 10.
Rising prices caused Chinese stainless steelmakers to cut production after customers refused to accept cost increases, according to Jinchuan Group Co., which controls 90 percent of the country's nickel output.
Stainless-steel makers have increased product prices by as much as 5,000 yuan ($647) a metric ton since January to compensate, Jinchaun said today on its Web site. Consumers ``refused to accept the higher prices,'' the company said.
Among other contracts traded on the LME, aluminum declined $26 to $2,845 a ton, tin slipped $25 to $14,125 and zinc lost $30 to $3,490. Lead gained $5 to $1,975 a ton.
To contact the reporters on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net ; Brett Foley in London at bfoley8@bloomberg.net .
Last Updated: April 12, 2007 10:56 EDT |
