On Monday, Copper prices fall as stocks in London Metal Exchange approved warehouses jumped, indicating monotonous demand, and as volumes slumped ahead of holidays in China.
Copper benchmark on London Metal Exchange was lower by 0.5% at $6,366 per tonne at 1029 GMT, close to the four-week lows touched last week. Latest data from LME shows the metal inventories used as a measure of economic health rise 36,225 tonnes to 232,225 tonnes. Since last week, stocks rise more than 46,000 tonnes or 25%.
"(Rising copper stocks) seem to be a trend, suggesting demand hasn't really picked up in the way people were expecting," a copper trader said, adding that activity in the physical market was weak. "Funds trade on headline stocks, creating momentum that others jump on."
China accounts for almost half of global copper demand estimated around 24 million tonnes this year. Expectations are for a pick up in the seasonally strong April to June period, ahead of rising Chinese construction activity in the third quarter. Fiscal and monetary stimulus earlier this year has strengthened the idea.
"The rally earlier this year was driven by the idea of an improving demand in China due to stimulus," said Julius Baer analyst Carsten Menke.
"Now we're waiting to see if these measures actually translate into increasing metals demand. The car market is still struggling, despite stimulus measures."