Copper Trades Little Changed in Asia on Slowdown, Stockpiles

By Glenys Sim

Aug. 6 (Bloomberg) -- Copper traded little changed in Asia after declining to the lowest in almost six months on concern global demand may be weakening as stockpiles rise amid a global economic slowdown.

Manufacturing shrank last month in China and Europe, and stagnated in the U.S., the biggest markets for metals. Chinese home-appliance makers, the world's largest exporters of the products, are cutting copper buying as air conditioner and fridge sales slow, said Jiangxi Copper Co.

``Market participants are mainly concerned with fading demand because of economic downturn materializing everywhere from the U.S. to Europe and now a slowdown in China,'' Tobias Merath, an analyst at Credit Suisse Group in Singapore, said today in a Bloomberg Television interview. ``So there's certainly a psychological component there.''

Copper for delivery in three months stood at $7,630 a metric ton on the London Metal Exchange at 1:12 p.m. Singapore time. The contract fell to $7,530 a ton yesterday, the lowest since Feb. 7.

Copper for October delivery rose as much as 660 yuan, or 1.1 percent, to 59,620 yuan ($8,702) a ton on the Shanghai Futures Exchange before trading at 59,480 yuan by the 11:30 a.m. local time break.

Copper inventories monitored by the London Metal Exchange climbed for a 17th day to 148,750 metric tons yesterday, the highest since Feb. 26.

``Inflationary pressures should come off rather quickly now with the oil price down so much,'' Merath said. ``This gives emerging markets some leeway to stabilize their growth rate, so we don't think this is really a start of a collapse of the commodities sector.''

Crude oil fell for a third day in New York, trading near $118 a barrel as demand may be further eroded by economic slowdowns in the U.S., Europe and China.

Among other LME-traded metals, aluminum rose 0.2 percent to $2,905 a ton, zinc was up 0.8 percent at $1,760 and nickel was down 0.4 percent at $17,530. Lead and tin had not traded as of 1:16 p.m. in Singapore.

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