Shanghai copper prices fell on Wednesday, tracking a sharp decline in London on Tuesday after London Metal Exchange (LME) refined copper inventories surged and concerns grew over the strength of import demand in top copper consumer China. The most-traded March copper contract on the Shanghai Futures Exchange (ShFE) ended down 1.7 percent at 52,730 yuan ($8,249.89) a tonne, its biggest daily drop since December 6 and its lowest close since December 14.
ShFE lead's recent rally ran out of steam as the metal closed flat at 19,575 yuan a tonne, while zinc shed 1 percent to 25,875 a tonne. On-warrant copper stocks, metal not earmarked for delivery from warehouses and available for investors, in facilities certified by the LME jumped by 28 percent on Tuesday, data showed, with traders saying there could be even more to come.
Cancelled LME warrants, or orders to take copper out of a warehouse, plunged by 16 percent on Tuesday to 44,000 tonnes, the biggest decline in the past four months, according to brokerage Argonaut Securities. "This decline in cancelled warrants may point to a weak imports appetite from China in January," analyst Helen Lau wrote in a note.
China imported 450,000 tonnes of unwrought copper in December, down 6.9 percent year-on-year, according to customs data released on Tuesday. China's own refined copper production was also at an all-time high of 865,000 tonnes last month. Chile's conservative President-elect Sebastian Pinera on Tuesday named a former finance minister in the top copper exporter, Felipe Larrain, to fill the same spot again in his new cabinet.
The top US securities regulator on Tuesday rejected arguments by Rio Tinto Plc, and two former top executives that its civil lawsuit claiming they concealed the plunging value of coal assets owned by the big Anglo-Australian mining company should be dismissed.
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