Copper Falls in Asian Trading as Dollar Rallies; Aluminum Down

By Li Xiaowei

Aug. 15 (Bloomberg) -- Copper declined for a second day in London as an advance in the dollar reduced demand for commodities as a hedge against inflation.

The dollar climbed for an 11th session today against a gauge of six major currencies including the euro and yen. Copper stockpiles monitored by the London Metal Exchange jumped to a six-month high yesterday as metals processing from China, the world's largest user, slowed in July.

``Metals are still weak across the complex due to the dollar's rally and lackluster demand,'' Tang Yijun, an analyst at China International Futures (Shanghai) Co., said today.


Copper for delivery in three months fell by as much as 2 percent to $7,240 a ton on the LME, and traded at $7,260 at 3:26 p.m. Shanghai time. Still, copper has gained 8.8 percent this year as traders bought raw materials as a store of value.

The metal for November delivery fell 2.9 percent to close at 56,040 yuan ($8,157) a ton on the Shanghai Futures Exchange.

Shanghai zinc closed down after plunging by the exchange- imposed limit in morning trade. Shanghai aluminum also declined as customs data showed Chinese exports fell from a 3 1/2 - year high in July, worsening a domestic supply glut.

Sales of the metal and its products retreated by 7 percent to 280,000 metric tons from a month earlier, customs data showed today. The decline was led by a fall in exports of metal alloys, the data showed.

London aluminum was 0.8 percent lower at $2,756 at 3:28 p.m. in Shanghai. Among other LME-traded metals, zinc declined 1.5 percent to $1,626 a ton, lead was unchanged at $1,660, nickel fell 2.1 percent to $18,700, and tin was 2.1 percent down at $18,300 after jumping by as much as 6.2 percent yesterday.

Ivernia Inc., which used to produce 3 percent of the world's mined lead, doesn't expect to restart exports from its Australian mine until at least early 2009, the Toronto-based company said yesterday in a statement.

To contact the reporter for this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net