Copper Declines in China on Rising Stockpiles, Economic Concern

By Feiwen Rong and Xiao Yu

Aug. 29 (Bloomberg) -- Copper dropped in Shanghai on concern demand may wane in China, the world's largest user, and abroad amid a global economic slowdown and rising inventories.

Copper prices in London have declined 6.5 percent this month as inventories climbed 19 percent. Stockpiles monitored by the London Metal Exchange yesterday jumped 2,200 tons, or 1.3 percent, to 170,500 tons, the highest in six months.

Base metals prices were lower ``with ongoing worries about the international economic outlook and large increases in aluminium and copper stocks contributing to the bearish tone,'' said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, in a report today.

Copper for November delivery fell 1 percent to 58,800 yuan ($8,601) a ton on the Shanghai Futures Exchange at 10:44 a.m. local time. Copper for delivery in three months was little changed at $7,540 a ton on the London Metal Exchange after falling 1.6 percent yesterday.

``Chinese copper demand is not strong because the economy is slowing down and it is low consumption season,'' Li Rong, analyst at Great Wall Futures Co. in Shanghai, said by phone today.

Speculation that Shanghai inventories will rise about 6,000 tons may also have weighed on prices, RBC Capital Markets said in a report. Stockpiles monitored by the Shanghai Futures Exchange fell to a six-month low of 21,796 metric tons last week.

Among other LME-traded metals, aluminum rose 0.6 percent to $2,745 a ton and. Zinc was little changed at $1,800 a ton, tin gained 1.7 percent to $20,500 a ton, lead was down 0.5 percent at $2,025 and nickel hadn't traded.

To contact the reporters for this story: Feiwen Rong in Singapore at frong2@bloomberg.net Xiao Yu in Beijing at yxiao@bloomberg.net;