Copper Steady as LME Warehouse Supplies Dwindle

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Copper prices retained their recent gains on Monday as falling inventories of the industrial metal fanned concerns about a short-term supply squeeze.

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Copper has also drawn support from concerns about a short-term shortfall in supply. Most industry analysts expect copper mine production to exceed demand in 2014, leading to the first supply surplus of the metal since 2009. But in recent months, global inventories of copper have been in decline, the Wall Street Journal reported.

Copper stored in the London Metal Exchange’s global warehousing network, the world’s largest metals-storage network, are at their lowest level since September 2008. Copper stocks are down 49% from the start of the year to 186,525 metric tons at the close of business on Friday, according to the latest data available, according to the Journal.

Closing at CNY 51,700 ($8,299) per metric ton on the Monday, May 19, Chinese copper bar rose 0.6 percent to finish as the day’s biggest mover. The cash price of Chinese copper rose 0.6 percent to CNY 51,900 ($8,331) per metric ton. The price of Chinese copper wire ended a two-day climb, settling at CNY 50,590 ($8,121) per metric ton. For the fifth consecutive day, the price of Chinese bright copper scrap held flat at CNY 44,300 ($7,111) per metric ton.

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The cash price of primary Japanese copper saw a 0.5 percent decline to JPY 734,000 ($7,228) per metric ton. At $3.87, the price of US copper producer grade 122 finished the market day up 0.3 percent per pound. The price of US copper producer grade 110 rose 0.3 percent to $3.87 per pound. The price of US copper producer grade 102 gained 0.2 percent to finish at $4.06 per pound.

The copper 3-month price saw little movement on Monday on the LME, closing out around $6,886 per metric ton. The primary copper cash price held steady on Monday on the LME, remaining around $6,949 per metric ton.

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