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Copper Prices Tumbled to a Week Low as Inventories Grow

November 5, 2009 at 20:24 by Vladimir Vyun

Copper prices dropped to a week low as growing inventories caused speculation that demand is falling for the metal used in wires and pipes. Inventories monitored by the London Metal Exchange surged to 379,825 metric tons (1.5 percent) today, the highest level since May 11th. Traders are seeing uncertainty about future demand as an opportunity to take some profit.

Copper mines where labor negotiations are being held this year have the combined annual capacity about 1.2 million tons. There is potential for strike at Antamina. Antamina, owned by BHP Billiton Ltd., Xstrata Plc, Teck Cominco Ltd. and Mitsubishi Corp., is trying to find agreement with the workers union.

December futures for copper delivery fell $0.026 (0.9 percent) to $2.967 per pound by 9:55 on the New York Mercantile Exchange’s Comex unit. Three-month delivery for copper dropped $56.75 (0.9 percent) to $6,518.25 per metric ton, or $2.957 per pound, on LME.

Copper prices doubled this year as Chinese imports jumped. Concern that supply is being constrained has kept prices at current levels, despite a prediction that Chinese import will fall.

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