Copper retreated from a three-year high on Tuesday, and other base metals also fell or trimmed gains, as speculators and funds locked in some profits after a steep rally. Earlier in the session, metals were on the rise against a backdrop of strong results for mining firms and talk of shortages in some metals, but analysts said there was nothing new to justify the rich prices.
"There's nothing really fundamental to drive things onwards from here, so I think it's a bit of misplaced euphoria and trend-following buyers jumping on the bandwagon," said Robin Bhar, head of metals research at Societe Generale in London. "Admittedly, the charts have seen some good upside breaks on copper, zinc and aluminium, but I think things are slightly over-extended here so there should be correction to where we broke out - around $6,500 on copper and just below $3,000 on zinc."
Nickel and zinc, both mainly used in steel production, had benefited as Asian ferrous prices extended gains, with Chinese iron ore futures surging nearly 5 percent to five-month highs. Benchmark copper on the London Metal Exchange closed down 0.1 percent at $6,580 per tonne, giving up gains after striking $6,649 a tonne, the highest since November 2014. It rose 1.5 percent in the previous session.
Some investors worried about more copper supply coming on the market after Indonesia's mining minister said the country expected to strike an agreement this month to allow Freeport McMoRan Inc to keep operating its huge Grasberg copper mine in Papua in the coming decades. More output was also possible at BHP Billiton's Escondida copper mine in Chile, which has recovered from a six-week strike faster than expected, with output now running at normal levels.
LME three-month nickel ended up 0.9 percent at $11,415 a tonne after touching $11,555, the strongest since December after LME inventories fell on Monday. The global deficit of refined nickel narrowed to 36,800 tonnes in the first half of the year from a deficit of 38,200 tonnes in the same period of last year, data showed.
LME aluminium finished 0.3 percent lower at $2,075 a tonne on trade selling after LME data showed on-warrant inventories - those not earmarked for delivery - rose by 16,275 tonnes, the fifth straight day of increases. LME zinc, untraded in closing rings, was bid down 0.2 percent at $3,118 after prices climbed on Monday to $3,180.50, the highest in nearly a decade as expectations of a large market deficit fuelled speculative buying. LME lead finished up 2.9 percent at $2,416 in closing rings, while tin fell 0.7 percent to $20,350.
Comments
Comments are closed.