Shanghai copper sinks

Shanghai copper prices fell nearly 1 percent, tracking losses in London as fears of slowing demand from the world's largest consumer, China, and the prospect of rising interest rates dented sentiment.
The most active August copper contract on the Shanghai Futures Exchange fell 0.8 percent to 62,420 yuan ($8,166) a tonne, from 62,910 yuan on Tuesday. "Copper prices are down on the expectation that demand will ease in China in coming months, but I doubt whether the prices will fall quickly as the cash price in London is still high," said Yang Jun, an analyst at China Futures.
China's total copper imports in may fell 28 percent to 220,561 tonnes, reflecting a build-up in stocks after record imports in the first four months of the year.
"The pullback in May copper imports was widely expected given the widening price discount of the Shanghai Futures Exchange price below the LME since March this year and reports of a large inventory build-up in China," Acquire Bank said in a note. Copper for delivery in three months on the London Metal Exchange was down $25 at $7,150, after falling 2.5 percent on Tuesday.
Cash copper was trading at a premium, or backwardation, have around $82 a tonne to the benchmark future. US benchmark 10-year Treasury yields hit a five-year high on Wednesday on expectations that interest rates around the world will rise, weighing on sentiment.
"As bond yields rise, borrowing costs go up and the return on more risky assets like equities and commodities decreases compared to interest rates," analyst Andrew Harrington at Australia and New Zealand Bank.
"This is not risk aversion, it is 'risk choosing' and if analysts think those interest rates will slow growth, they are likely to hurt demand for industrial metals."
The market saw some support from a string of strike threats in Latin America and Canada. More than 400 workers at Strata Plc's CCR copper refinery in Montreal were on strike after talks with the company broke off, company and union officials said.
The company said the refinery, which can produce 370,000 tonnes or 1.7 percent of world capacity, will operate at a reduced rate but was unable to say what that rate was.