NEW YORK – Copper futures posted the biggest loss in two weeks as inventories tracked by the London Metal Exchange climbed the most since early March, dispelling concerns about potential shortages.
Stockpiles rose 15% to 315 925 metric tons, bourse data show. Copper also fell as the dollar rose and crude-oil prices plunged. Lower energy prices decrease the cost of producing metals, which could lead to higher supply.
Soaring inventories help mute supply worries as workers at the Antofagasta Plc-operated Zaldivar copper mine in Chile consider a strike. The red metal has climbed more than 5% this year, helped by a six-week walkout at BHP Billiton’s Escondida operation in Chile, the world’s biggest copper mine, and a contractual dispute inhibiting shipments from Freeport-McMoRan Inc.’s Grasberg site, the second-largest.
“The massive stock increase seems to have taken the sting out of the news,” Edward Meir, an analyst at INTL FCStone in New York, said in a note Wednesday. Copper was “knocked lower today by a 40 000 t surge in LME stock holdings that has brought inventories to back over the 300 000 t mark.”
Copper futures for delivery in September declined 1.2% to settle at $2.66 a pound at 1:17 p.m. on the Comex in New York, marking the biggest loss for a most-active since June 20.
Prices retreated as automated trading systems responded to the change in stockpiles, Malcolm Freeman, a director at Kingdom Futures, said by phone.
The Bloomberg Industrial Metals Sub-index fell 1%, poised for the steepest slump since June 12. Base metals are declining as crude oilended its longest winning streak this year, as Russia was said to oppose any proposal to deepen OPEC-led production cuts.
Metals also declined as the Bloomberg Dollar Spot Index advanced, making raw materials pricier for holders of other currencies.
On the LME, copper, lead, nickel, tin and zinc declined, while aluminum rose.