Copper prices drop on China trade deficit increase

Copper prices were lower Thursday after new data showed that China’s trade deficit grew to $7.3 billion in February, its highest in seven years, raising the possibility that demand for the metal will drop there.

Data also showed that imports of unwrought and semi-finished copper into China fell by 35.4 percent last month from January, while copper scrap imports dropped by 30.6 percent in February.

In addition, the US Labor Department reported that first time unemployment claims in the United States were up by 26,000 last week, more than double the expected increase, and the US dollar was stronger, both tending to push prices lower.

May copper was down 1.5 cents to $4.20 per pound in New York trade, while three-month contracts for the metal used in construction and manufacturing dropped $84 to $9,191 per tonne on the London Metal Exchange.

The declines came even though copper stockpiles in warehouses monitored by the LME dropped by 250 tonnes during the session, as inventories remained 20 percent higher than the recent low in December.

Among precious metals, April gold ended the floor trade session in New York down $17.10 to $1,412.50 per troy ounce, a decline of 1.2 percent, after being nearly 2 percent before yesterday’s close earlier, before reports from Saudi Arabia that police opened fire on demonstrators after the government there said it will not tolerate demonstrations, a day ahead of “Day of Rage” protests scheduled for Friday.

Other precious metals also saw prices drop in New York trade, with May silver falling 98 cents to $35.07 per troy ounce while April platinum was down $36.40 to $1,765.60 per troy ounce and June palladium dropped $15.25 to $766.40 per troy ounce.

(Source: http://www.metalmarkets.org.uk/2011/03/10/copper-prices-drop-on-china-trade-deficit-increase/)