London Metal Exchange (LME) copper prices ended lower in trading on Monday as profit-taking replaced short covering in jumpy conditions, dealers said. The three-months price rose above $3,400 a tonne around midday on short covering induced by nearby tightness after 'third Wednesday' July pricing.
"Traders sold copper towards the end of the rings, trying to put a top on the market, and it will soon need a close above $3,400 to consolidate higher," a trader said. Three-months ended at $3,363, not far off the $3,435 all-time peak in June, but down $15 from Friday's kerb close.
Losses will be restricted in the next week as inventories fell 675 tonnes on Monday to a new 31-year total low of 27,000 tonnes, with the market heading into a tight period.
The LME's September date is around $3,430 a tonne and it costs around $136 to buy an option at this strike.
In September, large open interest is in place at the $3,200, $3,100 and $3,000 strikes - 1,200, 1,479 and 2,393 lots.
There are also 1,050 lots open at $2,825, but a sizeable 6,359 lots are open at the $2,650 strike. There are no similar tonnage's open in calls.
The cash/threes backwardation was slightly wider at $240.
In New York, COMEX copper futures rallied to fresh 16-year peaks on fund buying on continued supply worries.
Strike-hit US copper miner Asarco said it will ship anode and blister copper to customers as its stocks of refined products run dry, a company spokesman said Friday.
Aluminium closed at $1,815, down $23, while nickel was at $14,125, down $225.
Zinc and tin also eased, while lead added $1 to $826.
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