Copper prices fall

Copper fell on Tuesday as investors fretted about softness in demand from top metals consumer China, while the deepening nuclear crisis in Japan and recent strength in oil prices also knocked the demand outlook. Three-month copper on the London Metal Exchange fell to close at $9,630 a tonne from $9,855 at the close on Monday.
Market sources think China's copper imports are unlikely to surge in April after a 29.2 percent rise in March since importers are worried about high stocks in Shanghai. "Confidence has taken a hit now," said Alex Heath, head of base metals at RBC Capital Markets. "The off-systems volumes have been very low," he added of Tuesday's trade.
Long-term, copper looked supported by a broadly expected supply deficit. However, there are concerns in the market that this deficit may not be as strong as previously expected. "You'll probably see some revisions from the banks and consultancies," Carl Firman, an analyst at Virtual Metals, said of the copper deficit forecasts. Also triggering some selling, long-term commodity bull Goldman Sachs on Monday advised its clients to take profits as there was a strong chance that oil and other commodity prices may reverse.
Soaring oil prices and inflation in emerging economies pose new risks to global recovery but are not yet strong enough to derail it, the International Monetary Fund said on Monday. Meanwhile, the economic damage from Japan's massive earthquake and tsunami last month is likely to be worse than first thought as power shortages curtail factory output and disrupt supply chains, a minister warned.
Higher inventories of copper in LME warehouses also pressured prices, fanning concerns about Chinese demand. Stocks have been rising since mid-December and last rose 1,000 to 446,700 tonnes, the highest level since July 1. Aluminium stocks fell 2,275 tonnes to 4,575,250 tonnes but stayed near a record 4,640,750 tonnes hit on January 20 last year.
Nonetheless, soaring power costs, lucrative bank deals that keep metal away from the market and strong demand growth are likely to boost aluminium prices this year. Aluminium closed at $2,660 a tonne from $2,689. Tin closed at $32,550 a tonne from a last bid at $33,290 on Monday while zinc was at $2,469 a tonne from $2,545. Lead was at $2,725 from $2,855 and nickel traded at $26,700 a tonne from $27,705.