Copper reverses gains after jump in inventories
[2008-12-23 17:03:34]
Copper reverses gains after jump in inventories
By Julie Crust
LONDON (Reuters) - Copper reversed earlier gains on Monday to fallas much as 3.5 percent after a sharp jump in inventories fannedpessimism about Chinese demand.
Copper stocks on the London Metal Exchange grew 7,275 tonnes to237,925, the highest level since March 2004. The increase followedgains of 6,775 and 6,575 at the end of last week.
"This is three days of substantial additions," said John Meyer,analyst at investment bank Fairfax. "This is combined with furthernegative news out of China.
A measure of Chinese manufacturing activity showed factory outputshrank sharply in October in the face of waning orders, whileofficials pledged further steps to boost domestic demand to keepthe economy from slowing too much. Three-month copper
on the LME fell as low as $3,954 a tonne, reversing an earlier highof $4,270. It last traded at $3,960 in official rings versusFriday's close of $4,099 per tonne.
Prices for the metal, used in construction and power, have fallenmore than 50 percent since reaching a record high of $8,940 a tonnein July.
Last month, LME copper fell nearly 36 percent, its biggest dropsince at least 1970 and possibly in the exchange's 130-year historyof copper trading. Nickel dropped 24 percent, its second biggestfall on record.
"I don't see any dramatic turnaround this month in commodities.Manufacturing is slowing in China. Industry is slowing down and forthe next couple of weeks at least there is no light at the end ofthe tunnel," said Peter McGuire of Commodity Warrants Australia.
Base metal prices had started this month stronger, buoyed by aweaker dollar and rising equity markets, although European sharesturned negative in mid-morning trade.
The dollar softened against the euro as rising Asian and Europeanequities helped to dampen extreme risk aversion.
PRODUCERS REACT
Aluminium rose as much as 2.6 percent before moving lower. It waslast bid at $2,025 compared with Friday's close of
$2,045.
Prices for the energy-intensive metal have dropped 40 percent sincereaching a high of $3,380 a tonne in July.
A number of mining companies have been forced to cut production,reduce capital expenditure and postpone new projects as metalprices have fallen close to or below marginal costs.
United Company RUSAL said it had suspended production at theZaporozhye Alumina and Aluminium Complex in Ukraine because currentmetal prices make the plant unprofitable.
Nickel last traded at $11,700 a tonne in volatile trading comparedwith $12,100 at the close on Friday.
Tin surged 5.2 percent to $14,100 a tonne before moving lower. Itwas last bid at $13,550 a tonne compared with the close on Fridayof $13,400.
Zinc was at $1,136 from $1,125 a tonne, while lead was trading down$35 at $1,470 a tonne.
http://africa.reuters.com/business/news/usnJOE4A20J6.html [2008-11-4]
Tag : copperBy Julie Crust
LONDON (Reuters) - Copper reversed earlier gains on Monday to fallas much as 3.5 percent after a sharp jump in inventories fannedpessimism about Chinese demand.
Copper stocks on the London Metal Exchange grew 7,275 tonnes to237,925, the highest level since March 2004. The increase followedgains of 6,775 and 6,575 at the end of last week.
"This is three days of substantial additions," said John Meyer,analyst at investment bank Fairfax. "This is combined with furthernegative news out of China.
A measure of Chinese manufacturing activity showed factory outputshrank sharply in October in the face of waning orders, whileofficials pledged further steps to boost domestic demand to keepthe economy from slowing too much. Three-month copper
on the LME fell as low as $3,954 a tonne, reversing an earlier highof $4,270. It last traded at $3,960 in official rings versusFriday's close of $4,099 per tonne.
Prices for the metal, used in construction and power, have fallenmore than 50 percent since reaching a record high of $8,940 a tonnein July.
Last month, LME copper fell nearly 36 percent, its biggest dropsince at least 1970 and possibly in the exchange's 130-year historyof copper trading. Nickel dropped 24 percent, its second biggestfall on record.
"I don't see any dramatic turnaround this month in commodities.Manufacturing is slowing in China. Industry is slowing down and forthe next couple of weeks at least there is no light at the end ofthe tunnel," said Peter McGuire of Commodity Warrants Australia.
Base metal prices had started this month stronger, buoyed by aweaker dollar and rising equity markets, although European sharesturned negative in mid-morning trade.
The dollar softened against the euro as rising Asian and Europeanequities helped to dampen extreme risk aversion.
PRODUCERS REACT
Aluminium rose as much as 2.6 percent before moving lower. It waslast bid at $2,025 compared with Friday's close of
$2,045.
Prices for the energy-intensive metal have dropped 40 percent sincereaching a high of $3,380 a tonne in July.
A number of mining companies have been forced to cut production,reduce capital expenditure and postpone new projects as metalprices have fallen close to or below marginal costs.
United Company RUSAL said it had suspended production at theZaporozhye Alumina and Aluminium Complex in Ukraine because currentmetal prices make the plant unprofitable.
Nickel last traded at $11,700 a tonne in volatile trading comparedwith $12,100 at the close on Friday.
Tin surged 5.2 percent to $14,100 a tonne before moving lower. Itwas last bid at $13,550 a tonne compared with the close on Fridayof $13,400.
Zinc was at $1,136 from $1,125 a tonne, while lead was trading down$35 at $1,470 a tonne.
Source: 沱沱网
Keywords:Industrial Supplies
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