SHANGHAI: Copper futures in Shanghai fell by 2,440 yuan, or nearly 4 percent, by midday on Friday before closing at 61,790 yuan, down 2.3 percent from the previous close, because of growing investors' concern about rising stocks of the industrial metal in China.
On the London Metal Exchange, copper futures fell below the $7,000 mark on May 24.
Analysts attributed the volatility in Shanghai trading to the down trend in London, which has been exacerbated by uncertainty arising from the large stocks held by Chinese domestic traders.
Stocks of the metal in warehouses monitored by the Shanghai exchange are reported to have risen 400 percent to about 100,000 tons from a low in February because of the increase in imports.
China imported 186,212 tons of refined copper last month, according to customs data. Total imports in the first four months of the year amounted to 669,697 tons, up 142 percent on a year earlier.
The pressure on copper futures prices grew after the World Bureau of Metal Statistics reported a 99,000 ton surplus in the first quarter of this year. The total surplus for the whole of last year amounted to 352,000 tons, according to the bureau.
Traders also said they worried that the increase in bank interest rates announced last Friday could further depress prices of commodity futures, including copper. Worries that the central government will launch more macro economic adjustment policies have contributed to the fall in copper futures prices, according to Ma Qian, an analyst with Jin Yuan Futures.
Trading in August copper on Friday was slow, partly because it was nearly the weekend.
Ma said prices could rebound somewhat in coming weeks, though the longer-term trend remained depressed unless there was a significant reduction in domestic copper stock.
(China Daily 05/26/2007 page10)