SINGAPORE, May 22 (Reuters) Prices for copper and zinc, the top performer among the base metals complex, tumbled further on Monday as investors continued to pull money out of the commodities sector, including gold and oil. By 0703 GMT, London Metal Exchange copper for delivery in three months was at $7,300/$7,350 a tonne, down $250 or 3.3 percent from Friday's London kerb close of $7,550. The red metal was earlier bid as low as $7,230 in Asia.
''We saw continued liquidation in copper,'' said a metals dealer with a major Japanese trading house in Tokyo.
Given current high volatility in the copper market, he put support for copper at $7,000.
On Friday, copper fell $540, or 6.7 percent, to end at $7,550 as investors shifted money into U.S. assets out of commodities, including gold and oil, on worries that rising inflation could raise interest rates and dent economic growth.
Friday's decline in copper prices was the biggest percentage drop since January 4, 2005, sending futures markets in Shanghai and New York sharply lower.
Peter Richardson, chief metals economist at Deutsche Bank, said in a daily note that copper's move on Friday exemplified the current volatility in metals prices and was making speculators nervous.
''Much like the rapid pace in which metals prices shot forward, the retracement is largely detached from conventional fundamental factors that typically underlie these markets,'' he said.
''Rising demand in both OECD and industrialising countries coupled with persistent shortage of physical supply currently characterises the base metals market and will continue to support strong prices regardless of the ebb and flow of speculative investor money.'' COMEX/SHFE Prices for copper, used in construction and electronics, reached an all-time high of $8,800 on May 11, having jumped more than six-fold since late 2001 on strong demand in China and India, supply disruptions and relentless fund buying.
Since then copper prices have declined 17 percent but have still gained more than 60 percent since the end of last year. On supply news, Grupo Mexico said on Friday it expected to meet 95 percent of its June contracts for copper and molybdenum, despite a two-month-long strike at its La Caridad mine.
In electronic trade, copper for July delivery fell 17.40 cents to $3.2950 a lb after trading $3.2760 and $3.4880 on the New York Mercantile Exchange's COMEX division.
After the COMEX close on Friday, the Commodity Futures Trading Commission (CFTC) said in its weekly Commitments of Traders report that net non-commercial short positions for copper stood at 2,482 lots as of May 16, more than double 915 lots in the previous week.
The non-reportable net long position fell to 3,099 lots compared with 3,894 lots in the week ended May 9. The most active Shanghai contract August, fell 4 percent, or 3,090 yuan, from the previous settlement to end at 73,920 yuan ($9,240) a tonne. It was also down 2,500 yuan from the previous close.
Shanghai's aluminium futures also lost by their daily limits, with the August contract down 4 percent, or 880 yuan, from the previous settlement to end at 21,010 yuan.
LME aluminium was at $2,680/$2,690 a tonne after losing $150 or 5.2 percent to close at $2,720 on Friday.
Zinc was at $3,130/$3,180 a tonne after shedding $190 or 5.5 percent to end at $3,230 on Friday. The metal, used as an anti-corrosive coating in galvanised steel production, reached a record $3,970 on May 11.
Gold extended losses as a rising dollar made precious metal more expensive in other currencies, with prices down more than 2 percent at $642 from $659.20/$660.00 late in the U.S. market, while U.S. crude was trading 98 cents lower at $67.55 a barrel.
Shares in the world's top miner, BHP Billiton, lost 2.96 percent to end at A$27.89 and Rio Tinto ended down 3.93 percent at A$75.22, while Zinifex Ltd., the world's number-two zinc miner, was down 14.89 percent at A$9.20.
Metal Prices by 0703 GMT LME ($/tonne), SFE (yuan/tonne) and COMEX (US cents/lb) Metal Last Net Change Pct Move LME Cu 7300.00 -250.00 -3.31 SHFE Cu* 73920.00 -2500.00 -3.27 LME Alum 2680.00 -40.00 -1.47 SHFE Alu* 21010.00 -840.00 -3.84 COMEX Cu** 354.00 -10.30 -2.83 LME Zinc 3130.00 -100.00 -3.10 LME Nickel 20100.00 -400.00 -1.95 LME Lead 1100.00 -50.00 -4.35 LME Tin 7800.00 -300.00 -3.70 Change so far in 2006 Metal Latest bid End prev year Pct Move LME Cu 7300.00 4395.00 +66.10 SHFE Cu* 73920.00 41720.00 +77.18 LME Alum 2680.00 2276.00 +17.75 SHFE Alu* 21010.00 19360.00 +8.52 COMEX Cu** 354.00 204.20 +73.36 LME Zinc 3130.00 1905.00 +64.30 LME Nickel 20100.00 13500.00 +48.89 LME Lead 1100.00 1051.00 +4.66 LME Tin 7800.00 6475.00 +20.46 * 3rd contract months for SHFE copper and aluminium.
** 1st contract month for COMEX copper.
($1=8.00 yuan) REUTERS PV RK1316
''We saw continued liquidation in copper,'' said a metals dealer with a major Japanese trading house in Tokyo.
Given current high volatility in the copper market, he put support for copper at $7,000.
On Friday, copper fell $540, or 6.7 percent, to end at $7,550 as investors shifted money into U.S. assets out of commodities, including gold and oil, on worries that rising inflation could raise interest rates and dent economic growth.
Friday's decline in copper prices was the biggest percentage drop since January 4, 2005, sending futures markets in Shanghai and New York sharply lower.
Peter Richardson, chief metals economist at Deutsche Bank, said in a daily note that copper's move on Friday exemplified the current volatility in metals prices and was making speculators nervous.
''Much like the rapid pace in which metals prices shot forward, the retracement is largely detached from conventional fundamental factors that typically underlie these markets,'' he said.
''Rising demand in both OECD and industrialising countries coupled with persistent shortage of physical supply currently characterises the base metals market and will continue to support strong prices regardless of the ebb and flow of speculative investor money.'' COMEX/SHFE Prices for copper, used in construction and electronics, reached an all-time high of $8,800 on May 11, having jumped more than six-fold since late 2001 on strong demand in China and India, supply disruptions and relentless fund buying.
Since then copper prices have declined 17 percent but have still gained more than 60 percent since the end of last year. On supply news, Grupo Mexico said on Friday it expected to meet 95 percent of its June contracts for copper and molybdenum, despite a two-month-long strike at its La Caridad mine.
In electronic trade, copper for July delivery fell 17.40 cents to $3.2950 a lb after trading $3.2760 and $3.4880 on the New York Mercantile Exchange's COMEX division.
After the COMEX close on Friday, the Commodity Futures Trading Commission (CFTC) said in its weekly Commitments of Traders report that net non-commercial short positions for copper stood at 2,482 lots as of May 16, more than double 915 lots in the previous week.
The non-reportable net long position fell to 3,099 lots compared with 3,894 lots in the week ended May 9. The most active Shanghai contract August, fell 4 percent, or 3,090 yuan, from the previous settlement to end at 73,920 yuan ($9,240) a tonne. It was also down 2,500 yuan from the previous close.
Shanghai's aluminium futures also lost by their daily limits, with the August contract down 4 percent, or 880 yuan, from the previous settlement to end at 21,010 yuan.
LME aluminium was at $2,680/$2,690 a tonne after losing $150 or 5.2 percent to close at $2,720 on Friday.
Zinc was at $3,130/$3,180 a tonne after shedding $190 or 5.5 percent to end at $3,230 on Friday. The metal, used as an anti-corrosive coating in galvanised steel production, reached a record $3,970 on May 11.
Gold extended losses as a rising dollar made precious metal more expensive in other currencies, with prices down more than 2 percent at $642 from $659.20/$660.00 late in the U.S. market, while U.S. crude was trading 98 cents lower at $67.55 a barrel.
Shares in the world's top miner, BHP Billiton, lost 2.96 percent to end at A$27.89 and Rio Tinto ended down 3.93 percent at A$75.22, while Zinifex Ltd., the world's number-two zinc miner, was down 14.89 percent at A$9.20.
Metal Prices by 0703 GMT LME ($/tonne), SFE (yuan/tonne) and COMEX (US cents/lb) Metal Last Net Change Pct Move LME Cu 7300.00 -250.00 -3.31 SHFE Cu* 73920.00 -2500.00 -3.27 LME Alum 2680.00 -40.00 -1.47 SHFE Alu* 21010.00 -840.00 -3.84 COMEX Cu** 354.00 -10.30 -2.83 LME Zinc 3130.00 -100.00 -3.10 LME Nickel 20100.00 -400.00 -1.95 LME Lead 1100.00 -50.00 -4.35 LME Tin 7800.00 -300.00 -3.70 Change so far in 2006 Metal Latest bid End prev year Pct Move LME Cu 7300.00 4395.00 +66.10 SHFE Cu* 73920.00 41720.00 +77.18 LME Alum 2680.00 2276.00 +17.75 SHFE Alu* 21010.00 19360.00 +8.52 COMEX Cu** 354.00 204.20 +73.36 LME Zinc 3130.00 1905.00 +64.30 LME Nickel 20100.00 13500.00 +48.89 LME Lead 1100.00 1051.00 +4.66 LME Tin 7800.00 6475.00 +20.46 * 3rd contract months for SHFE copper and aluminium.
** 1st contract month for COMEX copper.
($1=8.00 yuan) REUTERS PV RK1316
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