Copper Takes a Dip

Copper futures in London and New York fell after China reported that its imports of the red metal declined by 34 percent in 2004, fueling concern that demand may be slowing.

Bloomberg reports that Chinese copper imports fell to 76,966 metric tons. Shipments for the first 10 months of the year declined 10 percent to 1 million tons according to the customs office. Prices have risen 54 percent in the past year, partly as Chinese demand for copper electrical cables and wiring for cars, buildings and appliances, helped drain inventories 87 percent, according to the Bloomberg report.

"The import figures are consistent with previous data and anecdotal evidence that Chinese demand has slowed a bit and some of the panic buying and stockpiling occurring there has stopped,'' David Thurtell, a commodity strategist at Commonwealth Bank of Australia in Sydney, told Bloomberg.

Copper for delivery in three months on the London Metal Exchange was bid at $3,034 a metric ton, and offered at $3,043 at 2:38 p.m. Sydney time, compared with yesterday's close of $3,077. The metal on Friday closed 0.1 percent lower after earlier falling as low as $3,035 a ton, the Bloomberg news item notes.

Demand for copper tubes used in appliances such as air conditioners and refrigerators fell about 10 percent in the past two months as prices rose, Zhang Shuying, futures manager of Shanghai-based Golden Dragon International Trading Co., told Bloomberg. The company is a subsidiary of Golden Dragon Precise Copper Tube Group Inc., China's biggest copper tube maker.

Copper prices also fell after Chip Goodyear, chief executive of BHP Billiton, said late Nov. 19 that copper prices may not be sustainable, Commonwealth Bank's Thurtell told Bloomberg.

"I would be a little careful about looking at the price today and seeing that as a price that is sustainable over the next 12 to 18 months.''

Copper for December delivery on the Comex division of the New York  Mercantile Exchange fell by as much as 1.2 cents, or 0.8 percent, to $1.42 a pound in after-hours trading at 1:34 p.m. Sydney time, Bloomberg reports.