London Metal Exchange (LME) copper closed slightly lower on Monday after paring early losses, and sentiment may turn heavily bearish if stock rises persist, traders said. "We are deep in quiet summer trading patterns and we are drifting lower on a lack of interest," one trader said.
Three months ended the day at $3,563 a tonne, from $3,572 at Friday's close. Copper earlier traded at $3,540.
LME stocks rose by 3,250 tonnes on Monday, lifting the total to 40,375, but traders noted the rising trend had been partially offset by increasing levels of cancelled warrants, up at 6,450 tonnes from just 450 last Monday.
Last month copper stocks hit a 31-year low of 25,525 tonnes.
"When stocks get towards 60,000 tonnes and prices move below $3,470 that will trigger a sell off," the first trader said. "We could see prices off by $400-500 if it really went with a clatter."
On Friday copper hit a record high of $3,600.
"(We) could be seeing the first chinks in the armour emerging in the bullish case," Man Financial analyst Edward Meir said.
"To start, the failure to breach the $3,600 level several times now could unnerve technicians," he said.
"Asarco strike talks are scheduled for later this week (and) any breakthrough here could also undermine...support for copper."
Workers at Grupo Mexico have planned industrial action in support of strikers at troubled US subsidiary Asarco.
Aluminium was at $1,873, down $12.50. Nickel was at $14,450, up $225, while zinc ended down $1.50 at $1,288.50.
Union leaders and company management at Canada's Teck Cominco will resume talks this week to resolve a three-week strike at a plant in British Columbia.
German lead and zinc smelter Sudamin said on Monday it had stopped production at its Duisburg plant and was seeking a buyer for the operation but other European zinc producers ruled themselves out as potential purchasers.
Tin saw no interest and was indicated at $7,030/50, down $70, while lead was at $840, down $17.
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