Copper prices down from record high

The price of copper dropped Tuesday after reaching new highs during the sessions in both New York and London, with declines coming on reports that inflation is still on the rise in China.

While inflation did not grow as much as had been expected there, it stood at 4.9 percent in China in January, raising the possibility that the government there could tighten monetary policy further, which holds risks that demand in the Asian nation, which accounts for a quarter of global copper consumption, could decline.

Also pushing prices down was another gain in inventories monitored by the London Metal Exchange, as stockpiles added 650 tonnes to 402.425 tonnes.

March copper dropped just over 9 cents to $4.54 per pound in New York trade after going to a new record at $4.65 per pound earlier, while three-month contracts on the LME were down $149 to $10,011 per tonne after going as high as $10,190 per tonne, another new record.

Citigroup issued a report predicting that copper prices will remain around $10,000 per tonne into the third quarter as demand outstrips supply, but added that the high prices could reduce consumption by half a million tonnes this year.

The price of aluminium was also down, dropping $12 to $2,502 per tonne as inventories grew, but tin went to a new high at $32,799 per tonne on continuing concerns about supplies from Indonesia.

Among precious metals, April contracts for gold added $9 to $1,374.10 per troy ounce in New York trade as investors looked to gold as a safe alternative investment after New York equities markets declined.

March silver added 16 cents to $30.70 per troy ounce, a six-week high, while April platinum was up $4 to $1,831.60 per troy ounce and March palladium gained $7.10 to $839.90 per troy ounce.