Copper prices fell for a third day on Wednesday, touching a more than two-week low as a further buildup in London Metal Exchange inventories eased supply fears.
Benchmark three-month copper on the LME was down 0.7% at $13,888 a metric ton in official open outcry activity. It earlier dipped as much as 0.9% to $13,856.50, the lowest since August 3.
LME stocks data on Wednesday showed a further 17,000 tons of copper inflows into LME warehouses on Tuesday, as well as 18,650 tons of reverse cancellations, where metal earmarked for removal from a warehouse was put back on warrant.
That means available LME copper stocks - after being drawn down to barely a day's worth of global consumption - have jumped almost 75% over the past week to 158,750 tons.
Inventories have been swollen due to a spike in the premium of the LME cash copper contract over the three-month forward that traders have sought to capitalise on. The spread last traded at a $176-a-ton backwardation, having eased from more than $500 earlier this week.
More than half of Tuesday's LME copper deliveries and reverse cancellations were in the U.S. storage hub of New Orleans.
"To me, this is just a transfer of metal from one exchange to another and drawing in some off-warrant," said Panmure Liberum analyst Tom Price. Off-warrant stock is metal in LME warehouses that is not tied to documents conferring ownership.
Copper stocks on the U.S. COMEX exchange continue to creep up, however, despite some small withdrawals, and stand at a record 670,273 metric tons.
"The fundamental reality is, (this copper) is not required in the U.S. - and traders need to make money," Price said.
Aluminium, zinc and lead also hit two-week lows. Aluminium slipped 0.3% to $3,211 per ton, zinc shed 1.2% to $3,650 after almost 10,000 tons of deliveries into LME warehouses in Asia, and lead lost 0.8% to $1,871.50.
Tin edged down 0.1% to $54,750, while nickel was the sole gainer, adding 0.7% to $16,875.
