Copper news

Copper Prices Decline in New York as Global Surplus Builds
By Halia Pavliva and Millie Munshi
Feb. 16 (Bloomberg) -- Copper fell in New York, snapping a three-day rally, on signs production of the metal used in pipes and wires is outpacing consumption.
Output from mines and scrap yards exceeded demand by 108,000 metric tons in the 11 months ended November, compared with a shortfall a year earlier, the International Copper Study Group said today in a report. Prices have dropped 34 percent from a record $4.04 a pound in May, partly because a U.S. housing slump curtailed usage.
``Consumption is growing more slowly than before, and much more slowly than world output,'' John Kemp, an analyst at Sempra Metals Ltd., said in a report.
Copper futures for May delivery fell 2 cents, or 0.8 percent, to $2.659 a pound on the Comex division of the New York Mercantile Exchange. Prices still gained 5.6 percent this week, the most since late July.
``We've rallied all week, so it's expected people are going to take some money off the table today,'' said Darren Stoody, futures trading director at Omnisource Inc. in Fort Wayne, Indiana.
Stockpiles in warehouse monitored by exchanges in London, New York and Shanghai have gained 13 percent this year, reaching the highest in 32 months, while prices have dropped 7.4 percent.
Homebuilders in the U.S. started work last month on the smallest number of new houses since August 1997 as a glut of unsold home and colder weather discouraged new projects.
The report suggests ``a slowdown in construction activity over the next two to four months,'' Kemp of Sempra said.
Builders are the biggest consumers of copper. The average U.S. home has 400 pounds of the metal.
The three-day rally was been driven by signs that demand will pick up in China, the worlds' biggest consumer of the metal. Chinese imports of copper and related products jumped 44 percent in January from a year earlier, customs data showed Feb. 12,
Chinese demand for raw materials will grow by an average 8 percent a year for the next 15 to 20 years, Robin Bhar, a base- metals strategist at UBS AG, said yesterday.
``It's not the mature, developed world that will drive base metals,'' Bhar said. ``It's the developing world.''
On the London Metal Exchange, copper for delivery in three months fell $40, or 0.7 percent, to $5,810 a metric ton. Prices still have gained 21 percent in the past year.
A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.