(31/03) METALS-Copper crumbles amid Chinese demand doubts

March 31, 2011

Copper prices ended
sharply lower on Wednesday, on pace for their biggest monthly
decline since June 2010, as weaker demand cues from China and
fears about a moderation in the global economic recovery kept
many bulls sidelined.
Chinese monetary tightening measures, coupled with unrest
in the Middle East, rising oil prices, euro zone debt problems
and Japan's nuclear crisis have all combined to throw the
magnitude of the global economic recovery into question, and
with it, demand for raw materials.
As a result, copper prices have responded, falling more
than 12 percent from their mid-February peaks at $10,190 per
tonne in London and $4.6575 per lb in New York, before
recovering to stand in aimless ranges at quarter's end.
"From a fundamental standpoint, it's leading a lot of
people to question whether or not they want to remain long
copper going into a new quarter," said Adam Sarhan, chief
executive of Sarhan Capital in New York.
London Metal Exchange copper for three-month delivery
CMCU3 dropped $209 to close at $9,381 a tonne, on track for a
5 percent fall in March, its first monthly decline since June
2010.
U.S. copper HGK1 followed suit, extending a downtrend in
place since mid-February before running into some technical
support near its 100-day simple moving average.