Copper Falls in Asia as Global Stockpiles Climb to 6-Month High

By Glenys Sim

Aug. 7 (Bloomberg) -- Copper fell in Asia as global stockpiles rose to the highest since February amid slow seasonal demand. Zinc also declined.

Copper inventories monitored by the London Metal Exchange climbed for an 18th day to 150,325 metric tons yesterday, the highest since Feb. 15. Copper prices have fallen 10 percent in the past month as stockpiles increased and on signs of slowing global economic growth.

``LME inventories continue to build, with South Korea now seeing inflows, perhaps owing to slackening Chinese demand ahead of the Olympics,'' Leon Westgate, an analyst at Standard Bank Group Ltd., wrote today in an e-mail.

Copper for delivery in three months dropped as much as 0.3 percent to $7,591 a metric ton on the London Metal Exchange. It traded at $7,610 at 10:10 a.m. Singapore time.

Copper for October delivery slipped as much as 820 yuan, or 1.4 percent, to 58,880 yuan ($8,588) a ton on the Shanghai Futures Exchange. It last traded at 59,130 yuan.

Rising global stockpiles also weighed on zinc prices. Inventories of zinc at LME warehouses rose for a sixth day to 165,475 tons yesterday, the highest since September 2006.

LME three-month zinc fell 0.6 percent to $1,755 a ton. Shanghai zinc for October delivery slumped for a fifth day to a record low of 14,255 yuan a ton. It last traded at 14,340 yuan.

A slide in metal prices during the ``summer lull'' has taken place on relatively low volumes and as consumers in China, the U.S. and Asia reduced inventories, Credit Suisse Group said.

``The true test should come in September when we expect consumers to return to the market and restock,'' analysts led by Jeremy Gray said in a report e-mailed yesterday. ``If consumers stay away for the rest of the year, then clearly we are not at the bottom.''

Among other LME-traded metals, aluminum was little changed at $2,912 a ton, and tin dropped 0.8 percent to $20,310 a ton. Lead and nickel had not traded.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net