SHANGHAI: Non-ferrous metals traded on the Shanghai Futures Exchange including copper, aluminum and zinc all fell yesterday after a weak performance on the global markets on concern over falling US demand and increased supply.
Copper and zinc futures contracts led yesterday's price drop in Shanghai. The most actively traded copper futures contracts for delivery in January 2008 fell 2.5 percent, the largest one-day drop since mid-August, to close at 61,890 yuan per ton. Zinc futures contracts saw the largest one-day slump since late June. The most actively traded zinc futures contracts for January delivery dropped 4.01 percent to end at 22,480 yuan per ton.
Three-month copper futures contracts on the London Metals Exchange (LME) yesterday fell 1.1 percent to $7,220 per ton, while three-month zinc futures contracts dropped 0.27 percent to $2,755 per ton.
Analysts attributed yesterday's price drop to a temporary shift in supply and demand in global markets.
Latest figures from the LME show that the aggregate copper inventory yesterday reached 169,175 tons, up 30 percent from late September. The zinc inventory on the LME also increased 33 percent to 82,100 tons.
Zhu Mingyuan, an analyst at Xin Guolian Futures Co, said the increasing domestic zinc supply since September has contributed to the falling price in both spot and futures markets.
"The expected drop in domestic consumption in the fourth quarter and the increasing inventory will push down zinc prices in the coming months," said Zhu.
According to figures from the Shanghai Non-ferrous Metals website, spot prices of zinc and copper yesterday also saw a big drop, with the zinc price falling 2.19 percent to 22,831 yuan per ton and the copper price dropping 2 percent to 62,500 yuan per ton.
Analysts said declining US demand for copper also heightened investor concern over a price drop in the coming months.