London: Rising inventories of industrial metals, copper and lead, capped prices on Tuesday, outweighing a lift provided by record high oil prices.
Copper futures on the London Metal Exchange (LME), often seen as a key gauge of the metals markets in particular and the real economy in general, are up more than 25% since the start of the year, while lead has been one of the star performers of all commodities, with gains of around 130%.
Both were down by the end of the official session on Tuesday, with copper falling $91 (Rs3,576.3) from Monday’s close to $8,059 per tonne, and lead down $81.50 or 2.1% at $3,718. “Crucially, we’ve seen stocks in the recent standard-bearer, lead, rise around 15%, which is very punchy,” ABN Amro commodity strategist Nick Moore said.
“On copper, we’ve now had a rise of around 10,000 tonnes this month. It’s come in small increments, but it’s given people a bit of a pause for thought,” he said.
Stockpiles of copper in warehouses monitored by the LME rose 875 tonnes on Tuesday to 140,525, taking levels to their highest since May, while lead stocks jumped 3,375 tonnes to 25,925, their highest since early September. This may indicate buyers of lead are holding back, analysts at Barclays Capital said.
The metal “will face pressure from this morning’s large... build in LME stocks, much of which was in Europe reflecting soft market conditions,” the bank said in a report. By contrast, five years ago there were almost 200,000 tonnes of lead in storage.
The historically small amount of metal available, combined with strong demand from battery makers in China, has driven lead to hit a series of consecutive highs in recent trading sessions.
Gold, which often benefits from economic uncertainty and geopolitical flashpoints, hit a fresh 28-year high of $766.60 per ounce (28.35gm). The precious metal has risen around 20% since the start of the year, and analysts see reason for more increase in its price.