Copper Declines in London on Japan’s Nuclear Crisis: LME Preview

Copper fell for a second day in London on speculation of slowing demand after Japan raised the severity rating of its nuclear crisis to the highest, matching the 1986 Chernobyl disaster.

Market News:

-- Japan’s Economic and Fiscal Policy Minister Kaoru Yosano said the March 11 earthquake may result in a larger hit to the economy than previously seen, indicating a greater appetite for stimulus one month after the disaster.

-- Japan raised the severity rating of its nuclear crisis to the highest, matching the 1986 Chernobyl disaster, after increasing radiation prompted the government to widen the evacuation zone and aftershocks rocked the country.

- U.S. banks such as JPMorgan Chase & Co. and Bank of America Corp. may report weak revenue for the first quarter after lending by the industry dropped in almost every category.

-- German inflation unexpectedly accelerated to the fastest pace in two and a half years in March after energy prices rose.-- The Bank of Korea kept interest rates unchanged after two increases this year, opting to see how rising oil prices and Japan’s earthquake will affect economic growth amid accelerating inflation.

-- Growth in railroad-shipping volume shows the U.S. economic expansion is gaining momentum, even with rising energy prices in the first .

-- The yen, dollar and Swiss franc rose against most of their major peers amid renewed demand for refuge assets after an earthquake shook buildings in Tokyo, a month after a record temblor triggered a nuclear crisis.

-- Treasuries rose after a nuclear warning and earthquakes in Japan sent Asian stocks lower, boosting demand for the relative safety of government debt.

Metals News:

-- Alcoa Inc., the largest U.S. aluminum producer, fell in New York trading after reporting first-quarter sales that missed analysts’ estimates as the dollar weakened.

-- Rio Tinto Group and BHP Billiton Ltd. will report record profits this year as Australia ships more iron ore than ever and still fails to meet Chinese demand that has risen sevenfold in a decade.

-- Vale SA’s 7.5 billion rand ($1.1 billion) bid for African copper producer Metorex Ltd. is too low and could be boosted by a rival offer, said Metropolitan Asset Managers, a fund holding Metorex shares.

-- Toho Zinc Co., Japan’s third-largest producer of the metal, has partly restarted operations at its Annaka smelter in Gunma prefecture, north of Tokyo, after the March 11 earthquake cut power supply at the plant.