Friday, December 17, 2010

Copper Stockpiles Grow in Asia, Commodity Shares Fall

In Asia Thursday Hong Kong's Hang Seng Index fell 1.3% to 22,669 and China's Shanghai Composite shed 0.5% to close at 2,898. In Japan the Nikkei 225 Index inched up 0.1% to end the day at 10,311.

Investors who've recently been racking up gains on the rapid rise of Chinese commodities were in for more pain today as copper slid for a third day. The metal, used around the world in the form of electrical wires, circuit boards, waterproof roofing and lighting rods, fell by as much as 1% to $9,045 on the London Metal Exchange. Stockpiles are increasing as dealers wait for demand to improve. This comes just two days after Reuters reported that copper could pass $11,000/mt in a year. "We believe that prices could spike substantially above these levels, most likely in late 2011," read a Goldman Sachs research note.

Jiangxi Copper tumbled 2.5% in Shanghai, and Yunnan Copper Industry fell 2.1%. Shares in other commodity companies also declined, with Zijin Mining plummeting 2.3% and Aluminum Corp. of China sliding 1.4%. (more)

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