Shanghai Copper Futures Decline as China Manufacturing Shrinks

By Glenys Sim

Dec. 1 (Bloomberg) -- Copper fell for a second day in Shanghai after China’s manufacturing contracted by the most on record, signaling the growing risk of a slump in the world’s biggest consumer of the metal.

Prices declined after the Purchasing Managers’ Index fell to a seasonally adjusted 38.8 in November from 44.6 in October, the China Federation of Logistics and Purchasing said today.

“With demand deteriorating, we’re going to continue seeing stockpiles rise and prices go down,” Lin Yuhui, research manager at China International Futures Co., said today from Shenzhen.

Copper for February delivery on the Shanghai Futures Exchange dropped as much as 2.2 percent to 27,260 yuan ($3,978) a metric ton, and traded at 27,370 yuan at 10:36 a.m. Singapore time. Benchmark copper futures fell 11 percent last month, marking the fifth straight monthly decline.

London Metal Exchange copper fell 0.4 percent to $3,605 a ton, and March-delivery copper on the Comex division of the New York Mercantile Exchange slipped 0.3 percent to $1.6450 a pound.

Inventories monitored by the London Metal Exchange climbed to 291,650 tons on Nov. 28, the most since February 2004. The metal used in electrical wiring and pipes is down 46 percent this year as LME stockpiles have nearly doubled.

Among other LME-traded metals, zinc was 0.8 percent lower at $1,200 a ton, lead rose 3.4 percent to $1,140, and tin slipped 1.6 percent to $12,100. Aluminum was down 0.5 percent at $1,764 a ton, and nickel declined 2 percent to $10,000 a ton as of 9:54 a.m. in Singapore.

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