Copper Falls to Two-Week Low; Tin Slides Most Since November

Copper fell to a two-week low in London as expanding stockpiles of metal fueled concern that demand may weaken. Tin dropped the most since November.

Copper inventories monitored by the London Metal Exchange rose today to the highest level since Aug. 13 and have climbed by 58,575 metric tons from the 2010 low on Dec. 10. Stockpiles tracked by the Shanghai Futures Exchange were at the highest level since June as of last week.

“The fact that LME copper stocks are up almost 60,000 tons and keep increasing may be also the reason for some participants to get cold feet,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. That’s in addition to selling after prices rose to a record $10,190 a ton on Feb. 15, he said.

Copper for three-month delivery slid $107, or 1.1 percent, to $9,735 a ton at 9:58 a.m. on the LME. Prices reached $9,705, the lowest level since Jan. 31. Copper for May delivery dropped 0.9 percent to $4.4415 a pound on the Comex in New York.

“The fact copper failed to stay above $10,000 might have led to profit-taking,” Weinberg said.

LME stockpiles climbed 0.3 percent to 407,200 tons, with the biggest gains in warehouses inSingapore, daily exchange figures showed. Orders to draw copper from stocks, or canceled warrants, jumped 29 percent, the most since April 26, to 17,575 tons, gaining for a fourth day.

Smaller Surplus

The global copper market’s surplus shrank to 20,000 tons last year from 410,000 tons in 2009, the World Bureau of Metal Statistics said yesterday.

“Fundamentals look rock solid, but do they really justify such high prices?” said Nic Brown, an analyst at Natixis in London. “The path of least resistance is upward, but on any kind of economic upset, the potential pullback would be greater.”

Tin fell 3.5 percent to $31,375 a ton after sliding as much as 5.2 percent, the most since Nov. 16. The 14-day relative strength index, a gauge of whether a commodity is overbought or oversold, was at 88.4 yesterday, above the level of 70 that some analysts who study technical charts view as a sign that prices may be poised to drop. The RSI exceeded 70 as of Jan. 24.

Refined-tin output from Indonesia, the world’s largest exporter, may drop this year for a second year, said Johan Murod, a director at PT Bangka Belitung Timah Sejahtera, a group of eight smelters. Production may total 60,000 to 70,000 tons, Murod said in an interview, compared with a Jan. 6 government forecast of 90,000 tons and last year’s 78,965 tons.

Zinc for three-month delivery on the LME slipped 0.2 percent to $2,481 a ton and aluminum dropped 0.4 percent to $2,494 a ton. Lead fell 0.5 percent to $2,580 a ton and nickel slumped 1.4 percent to $28,167 a ton.

(Source: http://www.bloomberg.com/news/2011-02-17/copper-falls-to-two-week-low-on-stockpiles-tin-slides-most-since-november.html)