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PrintCopper suffered its biggest one-day decline in nearly four months on Monday, as rising oil prices and geopolitical instability fanned recovery doubts. Chinese measures to tackle inflationary pressures also dimmed demand prospects.
"It's kind of a one-two punch," said Michael Gross, futures analyst with Optionsellers.com in Tampa, Florida. The crisis in Libya and the prospects of further unrest in oil-rich Middle Eastern countries kept oil prices buoyant near 2-1/2-year highs and inflation concerns at a high, causing another wave of risk reduction across the base complex.
"There is risk concern, and base metals, typically being seen at the risky end of the spectrum, are being sold," Societe Generale analyst David Wilson said.
London Metal Exchange (LME) three-month copper CMCU3 dropped $396 or 4 percent to close at $9,499 a tonne in its biggest daily fall since mid-November 2010. Prices were pegged 7 percent off from the Feb. 15 record at $10,190.
INVENTORIES RISE
Copper stocks continued to build, rising 1,850 tonnes to 427,150 tonnes, the highest level since July 2010, data released on Monday showed.
MCU-STOCKS
Inventories of copper have climbed by about 20 percent since December, raising some concerns about waning demand.
With that bearish inventory trend in place, the copper curve stood at a $10.00 contango -- a discount for cash versus three-month material MCU0-3 -- from a $70 backwardation, or the premium for cash over three-month material, in mid-December.
Metal Prices at 1937 GMT
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2010 Ytd Pct
move
COMEX Cu 434.15 -14.40 -3.21 444.70 -2.37
LME Alum 2557.00 -43.00 -1.65 2470.00 3.52
LME Cu 9498.00 -397.00 -4.01 9600.00 -1.06
LME Lead 2579.00 -51.00 -1.94 2550.00 1.14
LME Nickel 27450.00 -1350.00 -4.69 24750.00 10.91
LME Tin 30700.00 -1150.00 -3.61 26900.00 14.13
LME Zinc 2368.00 -93.00 -3.78 2454.00 -3.50
SHFE Alu 16875.00 -115.00 -0.68 16840.00 0.21
SHFE Cu* 74200.00 -520.00 -0.70 71850.00 3.27
SHFE Zin 18860.00 -410.00 -2.13 19475.00 -3.16
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