By Glenys Sim
Feb. 16 (Bloomberg) -- Copper led industrial metals lower in Asia on concerns a contracting Japanese economy and continued weak signs from U.S. manufacturers will further damp demand for raw materials.
The metal, used in electrical wiring and pipes, dropped as stockpiles tallied by the London Metal Exchange gained to the highest since October 2003. Inventories in Shanghai also rose last week to the most since October 2008.
“The optimism we saw last week is fading as news flow continues to be bad,” Zeng Chao, an analyst at Everbright Futures Co., said in an e-mail today. “The large build up of stockpiles is also hanging over investors’ heads.”
London Metal Exchange copper fell as much as 2.8 percent to $3,335 a metric ton and traded at $3,355 as of 3:20 p.m. in Singapore, extending last week’s 3.1 percent decline. Copper for May delivery on the Shanghai Futures Exchange slid as much as 4.7 percent to 27,110 yuan ($3,967) a ton, before ending at 27,390 yuan.
Declining equities also weighed on investor sentiment, said Zeng. Asian stocks fell as Japan’s economy shrank the most since 1974 and Group of Seven finance chiefs said the economic slowdown will persist through most of 2009.
Seventeen of 26 analysts, investors and traders, or 65 percent, surveyed by Bloomberg News said copper would drop this week, as reduced industrial production in the U.S. signals lower demand from automakers and other manufacturers.
Among other LME-traded metals, aluminum slid 0.5 percent to $1,370.50 a ton, zinc fell 0.9 percent to $1,143, lead lost 1.7 percent to $1,150, nickel dropped 0.7 percent to $10,250, and tin declined 2.2 percent to $11,125 as of 3:21 p.m. in Singapore.
-- Editors: Richard Dobson, Indranil Ghosh
To contact the reporter on this story: Glenys Sim in Singapore at Gsim4@bloomberg.net
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