NEW YORK (MarketWatch) — May 11, 2009 – Copper futures fell more than 3% Monday, pacing losses in crude oil and stocks, as worries returned that demand from China, the world’s biggest copper consumer, may slow. Gold moved slightly lower.
Copper for July delivery lost 8.15 cents, or 3.8%, to $2.064 a pound on the Comex division of the New York Mercantile Exchange. Copper had gained more than 2% last week.
The decline in copper came after a sharp drop in futures trading in Shanghai. Weighing on sentiment was a 45% jump in Shanghai copper stocks last week to their highest level since the end of March, said analysts led by Alex Heath at RBC Capital Markets.
China’s State Reserves Bureau is believed to have bought more than 300,000 tons of copper since March. But some analysts expected the country’s imports will slow down in the next few months.
"Physical copper premiums were steady across much of Asia last week as supplies in the region eroded, but easing tightness in China hinted that the dragon’s appetite for the metal may be waning," said analysts at RBC Capital.
The State Council also plans to examine the case for further tax changes and more state stockpiling of base metals.