Metals decline in LME trade

Print this page Posted on : 08-03-2007 by recycleinme.com

Copper led industrial metals lower in London on speculation that a stock-market slump spurred by losses from US subprime mortgages will spread to commodities.

London Metal Exchange listed metals have the highest correlation among commodities to the Standard & Poor’s 500 Index of US stocks, said Mr. Michael Lewis, head of commodity research at Deutsche Bank AG.

In July, the index had its biggest monthly decline in three years. Stocks dropped on Wednesday in Europe and Asia.

“The metals sector is the one to watch whether there would be a contagion,” Mr. Lewis said in a telephone interview from London. “At the moment I think any impact will be short-term.”

The US is the world’s second –largest user of copper and aluminium, after China. Copper, used in plumbing, has quadrupled in the past five years while nickel has risen sevenfold, spurred by the economic expansion in the two nations. Copper for delivery in three months on the LME dropped $151, or 1.9 per cent, to $7,859 a tonne as of 10.07 a.m. local time. Earlier, it fell as much as 2.1 per cent, the largest intraday loss in the week. Nickel fell $695 to $30,750 a tonne.

Copper stockpiles monitored by the LME grew 1.7 per cent to 103,475 tonnes, the exchange said in a daily report.

Nickel stockpiles rose 3.1 per cent to 14,412 tonnes. They have doubled this year.

Aluminium dropped $26 to $2,725 a tonne, lead fell $40 to $3,065 and tin declined $500 to $15,700. Zinc slid $82 to $3,463 a tonne.

Source : Business Line