Copper fell to its lowest price in a month on Tuesday as investors worried that rising interest rates in emerging economies would dampen demand, while tin hit a record high on supply concerns. Benchmark copper on the London Metal Exchange closed at $9,250 a tonne versus $9,529 at Monday's close.
-- Tin hits record high of $28,200/T
The metal used in power and construction had slipped to a one-month trough at $9,236. Last week it hit a record high of $9,781 a tonne, but analysts said that the chance for a deeper correction in the near term was growing. "Right now fundamentals aren't particularly supportive of prices," Barclays Capital analyst Gayle Berry said, citing weak Chinese imports, soft Chinese physical buying and LME copper inventories increasing since December.
Tin hit a record high of $28,200 a tonne. It closed at $28,195 versus Monday's $28,095 close. The price of tin, used in solders and tinplate, has been underpinned by supply complications in top producer Indonesia and by rising demand. World tin demand rose by 12.5 percent last year, according to an annual survey by ITRI.
LME copper inventories rose by 7,575 tonnes to 359,525 tonnes, bringing stockpiles to the highest since mid-September, the latest data showed, although they are still down by 30 percent from year-ago levels. The backwardation - or premium - for cash copper against the benchmark three-months contract has also settled at around $15 from $70 just six weeks ago, both signs that 2011 demand has been slow to ramp up. Nickel stocks continued to decline amid drawdowns from Singapore and Rotterdam as a trader said demand from the stainless sector was "steady if a little unexciting", and Goldman Sachs said it expected prices to fall. At 134,958 tonnes, nickel stockpiles stand around one fifth below record highs of 166,476 hit early February 2010.
"We...do not believe that nickel or zinc prices will break out higher from today's levels in the near term and would advise producers to use today's prices to lock in attractive near-term levels, particularly in nickel where we see much lower ranges as the year progresses," Goldman Sachs said in a note. The investment bank sees nickel at $19,500 by the end of the year. Nickel closed at $25,900 a tonne from the $26,150 close. Lead and zinc fell to their lowest in more than one month. Lead was untraded but bid at $2,336 a tonne from $2,405, while galvanising material zinc ended at $2,221 a tonne from $2,302. Aluminium closed at $2,361 a tonne versus $2,413.