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Ardent Listener
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 Posted - 01/15/2008 : 07:13:56
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Copper Falls Most in a Month as Consumers Judge Prices Too High
By Chanyaporn Chanjaroen
Jan. 15 (Bloomberg) -- Copper fell the most in a month, leading metals lower in London, as some consumers judged prices rose too rapidly in the best start to a year in two decades. Nickel and zinc also declined.
Copper has gained 9 percent this year, compared with a 3.2 percent advance in the UBS Bloomberg Constant Maturity Commodity Index. Funds including the Dow Jones-AIG Commodity Index have been boosting purchases of industrial metals as part of an annual rebalancing of investments that ended today.
``Customers said prices are too high,'' Andrew Silver, a trader at Natexis Commodity Markets Ltd., said today by phone. ``The market is stuck'' between fund buying and weak demand from buyers in the U.S. and Europe, he said. Natexis is one of 12 companies that trade on the London Metal Exchange floor.
Copper for delivery in three months on the LME fell $150, or 2 percent, to $7,250 a metric ton as of 12:41 p.m. in London. Earlier it fell 2.4 percent, the biggest drop since Dec. 17 based on closing prices. The metal had risen 11 percent in the year as of the close yesterday.
Stockpiles of copper monitored by the LME fell 4,500 tons, or 2.3 percent, to 194,100 tons, the biggest drop since July 9, according to daily data. Inventories, including those tracked by the Shanghai Futures Exchange and Comex, stood at 233,148 tons, or 4.7 days of global consumption. The total is below last year's average of 4.9 days.
The drop reflects a relocation of metal to non-LME Asian destinations rather than a sign of higher demand, Silver said.
March-delivery futures fell 5.9 cents, or 1.8 percent, to $3.28 a pound on the Comex division of the New York Mercantile Exchange.
Mexico Protest
Mexico's largest mining union will hold a one-day walkout at all 73 of its sections on Jan. 16 to protest a court decision to strike down a five-month work stoppage at Grupo Mexico SAB's Cananea copper mine, according to Carmen Romero, a spokeswoman for the union.
The stoppage at Cananea has cost Grupo Mexico about $600 million in lost sales since it began July 30. A judge on Jan. 11 ordered workers back to the job. The union denied Grupo Mexico's claim today that 75 percent of workers have returned.
Output expanded elsewhere. Chile, the world's largest copper producer, will produce an extra 5.3 percent this year, following a 3.3 percent increase in 2007, the nation's central bank said today on its Web site.
Aluminum dropped $31.75 to $2,516.25 a ton. Exports from China, the world's biggest producer of the lightweight metal, fell to the lowest in five years in 2007.
Aluminum Exports
The nation is likely to become a net importer of aluminum in 2009, boosting prices, according to an October note by Sanford C. Berstein Ltd. analyst Andrew Keen.
Net exports of aluminum and alloys were 263,451 tons from January to December, according to the Beijing-based customs office. That compares with a peak of just over 700,000 tons in 2006 and 206,000 tons in 2002, according to Beijing Antaike Information Development Co.
Nickel lost $500, or 1.7 percent, to $28,800. The metal, used in stainless steel, was in a surplus of 94,100 tons in the first 11 months of 2007, the Lisbon-based International Nickel Study Group said today. Production rose 5.1 percent to 1.3 million tons and consumption dropped 5.8 percent to 1.21 million tons, according to the group.
Lead dropped $40, or 1.5 percent, to $2,690, tin declined $150 to $16,300 and zinc fell $75 to $2,320.
Following are technical gauges for copper:
20-day moving average 6,859
100-day moving average 7,319
200-day moving average 7,462
14-day relative strength index 60.42
Fibonacci Start End 50% 61.8%
5,250 8,335 6,792.50 7,156.5
To back test technical gauges, BTST
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
Last Updated: January 15, 2008 07:55 EST
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Cu down too
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