Copper Futures Fall as Fears of Weak Demand Weigh

Copper futures fell as Chinese inventories rose, originating worries about lower demand from China, the top consumer of the metal in the world.

Inventories of copper monitored by the Shanghai Futures Exchange surged to 55,607 as of March 27 signaling demand has weakened.

In the London Metal Exchange, supplies declined 1,150 tons or 1 percent to 111,350 tons today.

Copper futures for delivery in three months declined $2.45 cents or 0.64 percent to $3.8065 a pound at 1:30 p.m. on the New York Mercantile Exchange Comex division.

Copper futures traded on the London Metal Exchange fell $13 or 0.15 percent to $8,483 a metric ton.

Concerning the United States, fears that an economic slowdown will crimp global demand sent copper prices down in Asia today.

Despite of better than expected economic reports copper futures remained low. The U.S. Institute for Supply Management said today the manufacturing index was at 48.6 in March, compared to 48.3 registered on February.

According to the values used for the index, 50 is the dividing line between contraction and expansion and specialists expected the index would drop as low as 48.0 in March.

Separately, the Commerce Department reported construction spending fell 0.3 percent in February when forecasts awaited a drop of 1.1 percent.

The reports however, helped the dollar gain. The Euro fell more than 1 percent against the U.S. currency today. An increase on the dollar makes commodities (denominated in dollars) more expensive for traders who buy with different currencies.

Economists expect a report on lost jobs in the United States this week. A negative result could add signs that the largest economy has fallen into recession.