April 06, 2011
Base metals fell on Monday in
London, down 0.5 percent on average, led by copper's 0.7 percent
slide in light trade during a two-day market holiday in China.
Three-month copper on the London Metal Exchange
slipped $64.25 to $9,294.75 a tonne by 0425 GMT. Volumes were
light with just 640 lots traded.
Copper investors ignored positive U.S. jobs data from last
week that cheered equity and energy markets, with a second
straight strong monthly read, suggesting a shift in the
struggling labour market.
"The focus right now is less about the U.S. jobs market and
more about Chinese buying -- or rather their reluctance to buy,"
said a trader in Singapore.
Copper prices hit a record high of $10,190 a tonne in
February, having rallied from just above $2,800 in December
2008, mostly due to s a surge in Chinese consumption and
stockpiling.
That has dragged prices down by almost 10 percent from a
record high, and while Western economies may not return to
pre-Lehman Brothers levels for another year or three, demand
from China, which consumes 40 percent of the world's annual
copper output of 21 million tonnes, is seen rising by around 10
percent this year.
Along with expectations of rising demand from Japan in the
second half to rebuild after last month's earthquake, analysts
expect a market deficit of between 300,000 and 800,000 tonnes
globally by the end of the year and with that, new highs.
Copper inventories in warehouses monitored by the Shanghai
Futures Exchange fell 6 percent last week and LME stocks saw a
rare weekly drop, down by just over 1,000 tonnes to 438,850
tonnes.
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