January 05, 2007	Friday	Zilhaj 14, 1427

LONDON, Jan 4: The price of copper, which struck historic records last May, tumbled on Thursday to a nine-month nadir on concerns that a global economic slowdown in 2007 could eventually spark a production surplus.

However, the release of old copper stockpiles by economic powerhouse China -- aimed at avoiding record high prices in London -- appeared to have distorted supply and demand for the base metal, traders argued.

Copper for three-month delivery on the London Metal Exchange (LME) slid to $5,625 a ton on Thursday, its lowest reading since April 5, 2006. The metal has now slumped from $7,000 in less than one month.

Prices for copper, which is used primarily in plumbing and the manufacture of electrical cables, are also under pressure because of fading strike fears at a key mine in major producer Chile.

Copper had hit an all-time record of $8,800 on May 11, 2006, owing largely to worries over lower global stocks and soaring demand -- especially from China and India. It has since plunged 36 per cent in value as those worries receded, according to analysts.

Current copper prices remain above year-ago levels -- they stood at about $4,400 per ton on January 1, 2006.Stockpiles of copper on the LME have now risen 23 per cent since December 1, 2006, and have more than doubled since last June. On Thursday, LME stocks stood at 193,175 tons -- marking the highest level since March 2004.

Some traders are taking the view that prices will sink further if the copper market moves into a production surplus in the face of a global slowdown, analysts contend.—AFP