Copper drops below $3,000 on demand worries

Print this page Posted on : 12-19-2008 by recycleinme.com

London, Dec. 18

Copper slipped 2 per cent to below the psychological $3,000 level on Thursday as demand concerns fuelled by the weak economic outlook dragged but a weaker dollar limited greater losses.

By 1036 GMT, copper for three month delivery on the London Metal Exchange stood at $2,980 a tonne versus $3,020 at the close on Wednesday and a session low of $2,960.

Deteriorating outlook

"The main driver is sentiment about the economic outlook (which) continues to deteriorate and has really been the story for months now," said Mr Stephen Briggs, analyst at RBS Global Banking & Markets. "We have entered a recession of unknown magnitude - it's very scary and applies globally."

Prices of the metal have fallen about 65 per cent since a record high of $8,940 in July.

LME copper stocks rose 2,275 tonnes to 324,175 tonnes - its highest level since early 2004 - and a reminder of weak demand for the metal.

Aluminium was at $1,499 from $1,510 on Wednesday. LME stocks of the metal, used in transport and packaging, jumped 27,100 tonnes to above 2 million tonnes - its highest since October 1994.

Inventories in aluminium have now climbed almost 250,000 this month alone.

Nickel was at $9,700 a tonne, from $9,805 at the close on Wednesday, lead at $981 from $995 and zinc at $1,102 from $1,100. Tin fell to $10,875 from $11,050 but was last at $10,925.

Source : Business Line