By Glenys Sim
April 15 (Bloomberg) -- Copper fell for the first time in five days on speculation the recent rally may deter purchases from China, the world’s largest consumer of the metal.
Futures also declined after a report showed U.S. retail sales slid 1.1 percent last month from February, triggering losses in equity markets. The benchmark MSCI Asia Pacific Index, which fell for the first time in five days today, is up 16 percent in the past month while copper surged 22 percent.
“Chinese buyers have always been price sensitive,” Pan Jinghua, an analyst at Shanghai Jinpeng International Futures Co., said today. “We definitely see some profit-taking and less physical purchases at these levels.”
Copper for three-month delivery on the London Metal Exchange fell as much as 1.6 percent to $4,623 a metric ton, and traded at $4,720 a ton at 10:05 a.m. Singapore time. The metal used in electrical wiring and pipes soared to $4,925 a metric ton yesterday, the highest since Oct. 20.
July-delivery copper on the Shanghai Futures Exchange fell as much as 0.8 percent to 38,290 yuan ($5,605) a ton, and last traded at 39,310 yuan. The most-active contract slumped the daily limit yesterday.
“We believe that the current high copper price represents an unsustainable stockpiling exercise by China,” Raymond Goldie, an analyst at Salman Partners Inc., said in a report.
China’s State Reserve Bureau has reportedly bought 300,000 tons of copper and may buy a further 600,000 to 900,000 during the remainder of 2009, according to the Macquarie Group Ltd. The country imported a record 374,957 tons of the metal and its products in March as buyers took advantage of low prices to replenish stockpiles.
Among other LME-traded metals, aluminum was little changed at $1,510 a ton, while zinc gained 1 percent at $1,455 a ton. Lead fell 0.3 percent to $1,481 a ton, and nickel slid 1.3 percent to $11,699 a ton. Tin was yet to trade.
To contact the reporter on this story: Glenys Sim in Singapore at Gsim4@bloomberg.net
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