Copper futures in Shanghai declined to a three-and-a-half-month low as increasing stockpiles led to speculation that supply may exceed demand this year.
Global copper inventories have climbed to the highest since April 2004, while stocks in Shanghai Futures Exchange warehouses rose 15.5 percent to 35,123 tons last week. That prompted some traders to take short positions, or bets that prices will fall.
"The fall accelerated in the afternoon as speculators rushed in taking short positions," Li Xun, an analyst at the Shanghai Continent Futures Co., said. Some 6,000 lots of new open contracts have been entered into today, most Li believed to be short contracts.
Copper for delivery in January on the Shanghai Futures Exchange fell 650 yuan, or 1.0 percent, to settle at 64,410 yuan ($8,185), the lowest since July 25. The contract fell as much as 2.1 percent to 63,650 yuan in the afternoon session.
Metal for immediate delivery in Changjiang, Shanghai's biggest spot market, rose as much as 450 yuan, or 0.7 percent, to 66,500 yuan a ton today.
"Cash prices still to some extent lend support to the futures market as they didn't drop further," said Li.
Shanghai aluminium rose 240 yuan, or 1.2 percent, to settle at 20,190 yuan, erasing some of yesterday's losses of 3 percent.
On the benchmark London Metal Exchange, copper for delivery in three months fell by $65, or 1.0 percent, to trade at $6,870 at 14:55 p.m. Shanghai time. The contract traded below $7,000 on Nov. 10 for the first time since June 29.
Global copper inventories monitored by the London exchange gained 3,100 metric tons, or 2.1 percent, to 151,300 tons, the exchange said yesterday.
Copper is used to make pipes and wires. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
豫公网安备41010502003434号