Copper near two-month low on rising stocks; zinc shines

Copper traded near two-month lows on Monday as rising inventories weighed on long-term sentiment, while zinc scaled 15-month highs. Benchmark copper on the London Metal Exchange closed 0.1 percent lower at $4,625 a tonne. The metal used in construction and power rose 0.2 percent last week. A long weekend in the United States for the Labour Day holiday was expected to keep trading in check.
"The fundamentals of copper are the weakest among all of the other metals because there is too much supply," said Robin Bhar, head of metals research at Societe Generale. "There have been mines commissioned in the last few years and it's all coming to the market. This is going to continue for a while where too much supply is hitting the market, outpacing demand."
Stocks of copper in LME-approved warehouses rose by 10,025 tonnes to 328,525 tonnes, bringing inventories up by more than 60 percent since August 11. Copper prices sank to a nine-week low of $4,600 a tonne on Tuesday. Zinc was flat at $2,362 an ounce after hitting a 15-month high of $2,371, but analysts were cautious about the sustainability of the rise as physical demand had not picked up much.
"It's been an explosive ride for zinc, but it has done so a little too quickly. We are not seeing the confirmation coming from physical demand to confirm this move and inventories are still fairly sizeable," Bhar said. Signs of strength in China's industrial sector should give Beijing room to push much-needed reforms through the end of the year, though trade and investment are expected to remain weak, according to Reuters polls.
Nickel, among last week's best performers with gains of more than 2 percent, gained 0.1 percent to $10,070 an ounce. Tin rose 0.4 percent to $19,395 per ounce, aluminium fell 0.5 percent to $1,586 and lead rose 1.2 percent to $1,969.50 an ounce. The Philippines will this week announce the suspension of more of the country's mines for violating environmental regulations, the mining minister said on Monday, as the government wrapped up a seven-week review.