Copper Resumes Decline in Asia as Recent Gains Seen Excessive

By Glenys Sim

Dec. 9 (Bloomberg) -- Copper fell in Asia as some investors sold the metal following its biggest gain in a month yesterday on optimism President-elect Barack Obama’s plan to boost the U.S. economy will spur demand.

Prices fell following the 10.8 percent surge yesterday as Obama pledged to increase spending on roads, bridges and school buildings to create or preserve more than 2.5 million jobs after companies cut payrolls at the fastest pace in 34 years last month.

“Stimulus plans at most boost sentiment, global economic data is still weak,” Li Jingyuan, an analyst at Haifu Futures Co. said today from Shanghai. “With that kind of big overnight move, you’re bound to get some profit taking the next day.”

London Metal Exchange copper dropped 4.1 percent to $3,180 a metric ton at 3:52 p.m. Singapore time, after yesterday rising the most since Nov. 10. The metal had fallen for seven days before yesterday.

March-delivery copper on the Comex division of the New York Mercantile Exchange dropped 3.5 percent to $1.4490 a pound, and copper for February delivery on the Shanghai Futures Exchange lost 4 percent to end the day 24,130 yuan ($3,509) a ton.

China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today.

“Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, and industrial growth will be something around 5 percent and export growth will be negative.”

China Stimulus

Chinese leaders may introduce more measures to stimulate the economy at the annual economic conference that is underway. Last month, the government announced a 4 trillion yuan ($581 billion) economic stimulus package and cut the benchmark lending rate by the most in 11 years. China is the world’s largest consumer of industrial metals.

“Any kind of fiscal stimulus will give the market a short term boost, however, an actual revival in demand will only be felt in the medium to longer term,” said Li.

Among other LME-traded metals, aluminum fell 1.3 percent to $1,501 a ton, zinc was 0.9 percent lower at $1,093, lead slipped 1.5 percent to $995, and nickel lost 0.3 percent to $9,300. Tin was up 0.4 percent at $11,700 a ton as of 3:56 p.m. in Singapore.

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