Monday, March 30, 2009

It was a good while it lasted... Copper falls from 5 month high

Copper prices rose to their highest in nearly five months on Friday, but slipped as doubts grew about the strength of real demand from manufacturers, particularly in China. Three-month copper on the London Metal Exchange traded at $3,995 a tonne in official rings, down from an earlier $4,168, the highest since Nov. 10. The metal used in power and construction closed at $4,085 a tonne on Thursday.

A major reason behind the price rise is the flow of copper to China, the world's largest consumer, in recent months. But analysts say most of it is heading for consumer or government stockpiles and does not mean real demand is picking up.

"We're still seeing Chinese buying...I'm assuming most of this buying is going into stockpiles at the moment," David Wilson, analyst at Societe Generale, said.

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