• search

Array

Written by: Staff
|

SINGAPORE, June 7 (Reuters) Copper prices slid further below $7,500 a tonne on Wednesday, a day after losing more than 3 percent as fears that rising inflation could lead to higher interest rates, slowing economic growth and demand for metal.

By 0409 GMT, copper for delivery in three months on the London Metal Exchange was at $7,475/$7,525 a tonne, down $35 or 0.5 percent from the previous day's London close.

''Fears of inflation and bearish sentiment regarding the general strength in the global economy have pressured metals and other commodities markets since the sell-off nearly one-month ago,'' Peter Richardson, chief metals economist at Deutsche Bank, said in a daily note.

''During this period, however, while base metals prices were initially extremely volatile, their ability to maintain historically high levels demonstrates their relative strength. Supply and demand fundamentals remain supportive, particularly in copper, nickel and zinc.

''Now that the traditionally weaker northern hemisphere summer has begun, we expect the trend of thinner trade to lead to more volatility, but also expect the elevated price environment to persist throughout the season.'' On Tuesday, LME copper fell $270, or 3.5 percent, to close at $7,510 as a firm dollar and inflationary fears prompted a broad-based sell-off in the metals sector and equity markets, despite another 750-tonne fall in LME stocks.

Copper prices largely ignored news of a force majeure at Grupo Mexico's Cananea mine and lower-than-expected output at Freeport McMoran Copper&Gold Inc.'s huge Grasberg mine in Indonesia.

SUPPLY CONCERNS Grupo Mexico has declared force majeure on June and July copper and molybdenum deliveries after failing to end a strike at its giant Cananea mine, the company said on Tuesday.

[ID:nN06217094] Cananea workers have been on strike since last week in support of an ousted union boss and fellow strikers at sister mine La Caridad, who walked off the job more than two months ago.

Prices for copper, used in wiring, tubes and coins, have fallen by 15 percent since the red metal reached its record high of $8,800 on May 11. However, the price is still up about 70 percent since the end of last year.

In electronic trade, copper for July delivery fell 4.45 cents to $3.4450 a lb after trading between $3.4400 and $3.4970 on the New York Mercantile Exchange's COMEX division.

The most active Shanghai copper contract <0#SCF:>, August, closed the morning session down 2,200 yuan at 67,400 yuan ($8,425) a tonne after dipping to its daily trading limit of 67,370 yuan.

''The market was under pressure from a softer tone in the physical market,'' said an LME dealer in Shanghai, adding that there was forward hedge selling by some Chinese smelters.

Shanghai copper futures have been plagued since last week by speculation of possible sales of the red metal by China's State Reserves Bureau, which is responsible for managing copper stocks for the world's largest copper consumer.

Shanghai aluminium futures <0#SAF:> were also down, with the most active August contract losing 180 yuan to end the morning session at 20,640 yuan a tonne.

LME aluminium was at $2,552/$2,562 a tonne versus $2,543, while zinc was at $3,460/$3,480 a tonne after losing $140 or 3.9 percent to end at $3,450 on Tuesday.

In other commodities, oil prices edged lower towards $72 a barrel, while gold fell further below $625 an ounce.

The dollar paused, after gains across-the-board on Tuesday as more U.S. central bank officials joined Fed Chairman Ben Bernanke in expressing concern about building inflation pressures in the United States despite a slowing economy.

Metal Prices by 0409 GMT LME ($/tonne), SFE (yuan/tonne) and COMEX (US cents/lb) Metal Last Net Change Pct Move LME Cu 7475.00 -35.00 -0.47 SHFE Cu* 67400.00 -2200.00 -3.16 LME Alum 2552.00 9.00 +0.35 SHFE Alu* 20640.00 -180.00 -0.86 COMEX Cu** 356.00 -2.45 -0.68 LME Zinc 3460.00 10.00 +0.29 LME Nickel 20900.00 -50.00 -0.24 LME Lead 1035.00 -4.00 -0.38 LME Tin 8050.00 -50.00 -0.62 Change so far in 2006 Metal Latest bid End prev year Pct Move LME Cu 7475.00 4395.00 +70.08 SHFE Cu* 67400.00 41720.00 +61.55 LME Alum 2552.00 2276.00 +12.13 SHFE Alu* 20640.00 19360.00 +6.61 COMEX Cu** 356.00 204.20 +74.34 LME Zinc 3460.00 1905.00 +81.63 LME Nickel 20900.00 13500.00 +54.81 LME Lead 1035.00 1051.00 -1.52 LME Tin 8050.00 6475.00 +24.32 * 3rd contract months for SHFE copper and aluminium.

** 1st contract month for COMEX copper.

($1=8.00 yuan) REUTERS CS GC1126

For Daily Alerts
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more