may be in for a copper sell off....not sure but copper...

may be in for a copper sell off....not sure but copper inventries rose dramatically...read on

Copper snapped two days of gains in London after stockpiles jumped the most in 19 months, boosting availability of the metal used in plumbing and power cables. Nickel, lead and other industrial metals also dropped.

Copper inventories monitored by the London Metal Exchange rose 8.2 percent to 114,275 metric tons, the biggest gain since December 2005, the exchange said today in a daily report. Almost all the increase was recorded in Gwangyang, South Korea. The port is the LME-registered warehouse closest to China, the world's biggest user of copper.

Stockpiled metal has been shipped out of China to take advantage of international prices that are higher than domestic prices, said Tobias Merath, a commodity analyst at Credit Suisse Group in Zurich. ``High imports into China in the first quarter created more supply, which we're seeing now,'' he said today in a telephone interview.

Copper for delivery in three months on the LME fell $185, or 2.4 percent, to $7,560 a ton as of 11:20 a.m. local time.

Metal stored at LME-approved warehouses provide users with a supply of last resort, and changes to inventory levels typically indicate the balance between production and demand.

Stockpiles at Gwangyang have more than quadrupled since the beginning of June. The port, along with Busan in South Korea, each have more copper inventories than any other location monitored by the LME. China doesn't have a port registered with the exchange, the world's largest metals market.

South Korean stockpiles will probably rise until the end of September, pushing copper to as low as $7,000, Merath said.