Copper slides on supply expectations and inventories

Copper prices slipped on Monday as worries about demand from top consumer China were reinforced by expectations of ample supplies and higher inventories in exchange-monitored warehouses. Benchmark copper on the London Metal Exchange ended down 0.9 percent at $5,880 a tonne, having last week touched $5,948.50, its highest since March 6.
"There is nothing to suggest the market is tight," Julius Baer analyst Carsten Menke said.
"We need to see signs of tightness driven by the supply disruptions, or if the market is amply supplied, as it seems to be at the moment, I'd say prices need to come down."
Inventories of copper in warehouses monitored by the Shanghai Futures Exchange have more than doubled to 325,278 tonnes since early January. Stocks in LME-approved warehouses, at 332,975 tonnes, are up nearly 70 percent since early February.
"High levels of refined inventories have immunized the copper market from strong price appreciation," Barclays analyst Dane Davis said in a note. "But this is not just a story about refined inventories...(scrap) that has been sitting on the sidelines for years has flooded into the market."
Supply disruptions in Chile, Indonesia and Peru have boosted copper this year.
Copper is holding above the 21-day moving average around $5,895, support at $5,860 near the 55-day moving average.
Worries about demand after G20 finance ministers dropped a pledge to keep global trade free and open weighed on prices of industrial metals overall.
Aluminium closed up 0.4 percent to $1,922 a tonne, zinc slipped 0.6 percent to $2,864, tin added 0.4 percent to $20,350 and nickel lost 0.9 percent to $10,165. Lead was untraded at the close, but bid down 0.7 percent to $2,274.
Earlier zinc touched $2,900.50, its highest since February 16, on reports that Chinese zinc smelters are planning maintenance that could cut 540,000 tonnes a year of capacity. That could mean a larger than expected zinc deficit this year. Tin price hits $20,495 a tonne, its highest since January 25, on concern about shortages on the LME market after cancelled warrants rise to nearly 50 percent of stocks. Backwardation, or premium, for cash tin over the three-month contract strengthened to $171 a tonne, its highest since December.