Copper Drops as Inventories Climb for 2nd Day

U.S. copper futures fell on Monday after reaching their highest levels last week since May 2006 on falling London Metal Exchange inventories.

Stockpiles monitored on the LME had their biggest one day jump in six months increasing 5.4 percent or 7,625 metric tons to reach 149,225 metric tons on Monday. This is the second gain reported by the LME after surging 4.6 last Friday. The total for both days was an increase of 13,850 metric tons.

Previously LME stockpiles had declined in 15 consecutive sessions sending the red metal to a record of $3.8545 a pound on Thursday, the highest for a most-active contract since May 30, 2006 when copper touched $4.04 a pound.

Copper futures for May fell $4 or 1.05 percent to $3.763 a pound on the New York Mercantile Exchange Comex division. In the London Metal Exchange copper prices had losses of $101 or 1.19 percent to $8,366 a metric ton.

Demand concerns have grown after a decline on sales of existing homes in the United States was reported today by The National Association of Realtors. Resales in January declined 0.4 percent to an annual rate of 4.89 million, the association said.

The results are signs that the housing slump is having a broader effect on spending, said the Federal´s Reserve Chairman Alan Greenspan on Monday. He added that this year the U.S. economy may possibly experience a deeper recession than previous downturns.