Bloomberg) — Copper slumped to a one-month low as a large delivery of metal into exchange warehouses in Asia refocused attention on demand during a seasonally weak period for industrial activity in China.
Prices fell as much as 2.6 percent to $6,885 a ton on the London Metal Exchange as inventories tracked by the bourse jumped by the most in 10 months, continuing a pattern of spikes and drawdowns in LME inventories seen throughout 2017.
The delivery comes as manufacturers in China prepare to dial back output during the week-long Lunar New Year holiday next month, and adds to evidence that copper demand is hitting a soft patch often seen at this time of year, according to Robin Bhar, an analyst at Societe Generale SA.
“The funds had taken prices to increasingly rarefied levels which weren’t justified by the fundamentals,” Bhar said by phone from London, adding that physical premiums paid by buyers in China have also slipped in recent weeks.
“The market probably knew this delivery was on its way, and now we’re seeing it being incorporated into the price.”
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