Shanghai copper futures closed up slightly on Wednesday, but showed signs of losing steam after reaching record highs in each of the previous four sessions, traders said.
Shanghai's most active March contract ended at 42,000 yuan ($5,203) a tonne, inching up 30 yuan from Tuesday's close. The price was well off an all-time high of 42,260 yuan hit in intruded trading on Tuesday. Trading volumes fell to thin 47,534 lots from Tuesday's 56,990 lots as high prices deterred buyers, traders said. "Prices are likely to consolidate in coming days after the recent heavy gains," said a Chinese trader.
"But the expected correction will not go too far as many investors see a continued Bull Run in the near term both at home and abroad." Traders said trends on the Shanghai market would also be affected by price movements on the London Metal Exchange, as the British market resumes trading on Wednesday after holidays on Monday and Tuesday.
Spot prices in Shanghai edged up an average of 80 yuan to move between 42,300 and 42,800 yuan per tonne on Tuesday. The domestic market had been playing catch-up with global prices since late last week. International and domestic copper prices had racked up repeated highs over the past eight weeks, due in part to massive short positions on the LME believed to be held by China's State Reserves Bureau (SRB).
But gains in domestic prices had lagged those of their global counterparts since mid-November, amid jitters that the SRB was trying to curb soaring prices through auctions of spot copper.
But the bureau has ceased such sales since December 8. Shanghai aluminium futures closed almost unchanged on Wednesday, largely in line with the domestic copper trend, traders said.
The most active March contract ended at 19,470 yuan a tonne, nudging up 10 yuan from Tuesday's close. Trading volume rose slightly to 56,594 lots from 53,338 lots on Tuesday.
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