Copper prices decline on real estate concerns

The Shanghai Futures Exchange (SHFE) copper prices decreased on Friday due to investors' concern over the declining property market around the country and overproduction of copper.

"We are increasingly worried about China's property market. New dwelling commencements are down 18.6 percent year-on-year in the first five months, the sharpest decline since 2009," Reuters reported on Friday, citing analyst Matt Fusarelli of AME Group.

On the other hand, data on Friday showed that weekly copper storage in Shanghai warehouses increased by 28.9 percent, signaling rising copper supplies in the future, according to the report.

The output of refined copper in June reached 623,428 ton, up by 9.5 percent year-on-year and a monthly record this year, data released by the National Bureau of Statistics on Thursday showed.

The copper surplus in the second half of 2014 has started to drive price concerns, Reuters said.

The most-traded copper futures for September ended at 49,740 yuan ($8,008.14) per ton on the SHFE on Friday, down 180 yuan or 0.36 percent compared to Thursday.

The copper price decreased by 2.30 percent compared to the previous week. The trading volume fell by 115,220 lots on Friday from Thursday's 423,458 lots.

Moreover, investors also have the concern over the outlook of copper demand from the property developers particularly after a Chinese company announced a possible debt default Wednesday, a report from Reuters said on Thursday.

China's Huatong Road & Bridge Group, a construction firm, said Wednesday it could not repay a $65 million debt, which will be the second default in the domestic bond market.

For the whole copper industry, the copper and related industrial production grew at a stable pace during the January-May period this year, but the declining copper prices and increasing operation costs for enterprises will still put pressure on the copper enterprises in the second half of this year, according to a report released by the China Nonferrous Metals Industry Association on Thursday.