Copper fell in London after higher production of the metal in China and expanding stockpiles indicated supply is ample.
Copper production in China increased 12 percent in the year’s first two months, according to the nation’s statistics bureau. Inventories tracked by the London Metal Exchange are the highest since 2010 and swelled today for a 19th session.
“The February copper output data was positive, which has a detrimental effect on prices,” Steve Hardcastle, head of client services for industrial commodities at Sucden Financial Ltd. in London, said by phone. “The longs to an extent are out,” he said, referring to bets on higher prices.
Copper for delivery in three months dropped 0.3 percent to $7,735 a metric ton by 10:34 a.m. on the LME. Prices will stay “range-bound for now above $7,700,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e-mail. Copper for delivery in May fell 0.3 percent to $3.506 a pound on the Comex in New York.
Stockpiles of the metal, up 62 percent this year to the highest since March 2010, rose 0.8 percent to 517,900 tons, daily LME figures showed. Orders to withdraw copper from warehouses jumped 40 percent to 33,400 tons, cutting this year’s drop to 35 percent, on a 10,000-ton request in New Orleans.
“There continues to be a tight market, with relatively low levels of visible stocks,” Antofagasta Plc (ANTO), which has four Chilean copper mines, said today as it reported annual earnings. The company predicted stronger demand growth in China and the U.S., the world’s two biggest consumers of the metal.
The dollar traded near the highest level since August against a basket of six currencies. A stronger greenback makes commodities less appealing as an alternative investment.
Zinc for delivery in three months on the LME rose 0.3 percent to $1,966 a ton after closing yesterday at the lowest level since November. The 14-day relative strength index, a gauge of whether a commodity is overbought or oversold, is below the level of 30 that indicates a potential impending rebound to some analysts who study technical charts.
Nickel, tin and aluminum fell in London. Lead rose.