Shanghai copper futures fall as SRB sales spotted

Selling by the State Reserves Bureau pushed down Shanghai copper futures in afternoon trade on Monday, domestic traders and brokers said.
Brokers representing the SRB were believed to have sold 8,700 lots of December and January contracts, futures brokers said. One lot is equivalent to 5,000 tonnes.
"Looking at the open interest positions, it's pretty clear it's the SRB selling for December. They've probably sold for January too, although it's harder to see," said a futures broker in Shanghai.
"But that makes sense, they wouldn't sell all at once." "We are also still a bit sceptical that they aren't just trying to bat the market down, first by talking and then by being seen in the futures market.
We think the market needs to see some real proof before it has a lasting effect on copper prices."
The SRB had yet to sell copper in the spot market, traders said, adding that jumps in inventories in warehouses monitored by the Shanghai Futures Exchange indicate it plans to deliver copper against short positions.
The bureau, which normally operates in secret, is planning to sell up to 80,000 tonnes of copper to try and push down high global prices of the red metal, traders said, although some expect actual sales to be lower.
Shanghai's most-active contracts, January, ended at 36,600 yuan on Monday, down 460 yuan from Friday's close. Trading volume surged to 134,892 lots, from 46,794 lots on Friday.
Spot copper prices rose to 38,100 to 38,250 yuan on Monday, up 150 yuan from Friday, before the futures markets began to lose ground. Benchmark copper futures on the London Metal Exchange were at $4,000 a tonne, up from $3,932.50 a tonne at the same time on Friday.
They came under pressure on Monday afternoon as Chinese traders sold both London and Shanghai. Shanghai aluminium futures rose slightly, with most-active January gaining 20 yuan from Friday's close to end at 17,220 yuan.
Volume rose to 18,686 lots, from 11,746 lots on Friday. Aluminium was boosted by LME aluminium futures, which went to ten-year highs on Friday.
The benchmark three-month contract was at $2,026.50 a tonne, up $19 a tonne from the close of Shanghai markets on Friday.