Copper Falls in Asia as Recent Gains Seen Overdone; Zinc Down
By Glenys Sim
June 6 (Bloomberg) -- Copper prices fell in Asia as recent gains on declining global inventories were seen overdone and concern eased that labor disputes in Chile, the world's biggest producer, may disrupt supply.
Inventories of copper tracked by the London Metal Exchange dropped for the 12th-straight session to 123,300 metric tons, the LME said yesterday in a daily report. Inventories in China have fallen in the past two weeks, the Shanghai Futures Exchange said on June 1.
``It's just a bit of profit taking after yesterday's rise,'' Xue Feng, an analyst at Maike Futures Co. in Shanghai, said by phone today. ``I expect the market will continue to drift as it consolidates at the current level.''
Copper futures for August delivery on the Shanghai Futures Exchange fell as much as 960 yuan, or 1.4 percent, to 66,300 yuan ($8,680) a ton. The most active contract closed down 0.5 percent at 66,940 yuan a ton.
The price of metal for immediate delivery in Changjiang, Shanghai's biggest cash market, was little changed at 65,300- 65,500 yuan a ton today.
London Metal Exchange copper for delivery in three months was up 0.1 percent at $7,550 a ton at 3:28 p.m. Shanghai time after falling 1.1 percent yesterday.
Prices also fell in New York yesterday on speculation that demand from the U.S. manufacturing sector will slow. Orders placed with factories rose less than half the rate economists had estimated, the Commerce Department said June 4.
Copper futures for July delivery on the Comex division of the New York Mercantile Exchange were little changed at $3.4410 a pound at 3:31 p.m. Shanghai time, after falling 0.8 percent yesterday in the biggest one-day decline since May 24.
Labor Accord
Concern about supply from Chile also eased after state-owned Codelco signed a wage contract with workers at the Radomiro Tomic mine in northern Chile, union director Luis Galvez said yesterday. The mine accounts for about 17 percent of the company's output.
Workers at the Dona Ines de Collahuasi mine in Chile said a preliminary wage offer by Xstrata Plc and Anglo American Plc was too low, increasing the risk of a strike.
Workers at six operations owned by Grupo Mexico SAB plan to strike beginning on June 10 to push for higher wages.
Zinc futures for August delivery in Shanghai fell 0.7 percent to 30,675 yuan a ton at the end of the day, while aluminum futures for August delivery were little changed at 19,920 yuan a ton.
London Metal Exchange zinc for delivery in three months fell 0.3 percent to $3,765 a ton at 3:35 p.m. Shanghai time. Aluminum was off 0.3 percent at $2,795 a ton at the same time.
Among other LME-traded metals, lead, nickel and tin for delivery in three months all fell in Asia to $2,315 a ton, $45,900 a ton and $13,800 a ton, respectively.
To contact the reporter for this story: Glenys Sim in Singapore at [email protected]
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