US copper futures ended with modest losses after scaling to new all-time records on Friday as some investors booked profits after the market's almost five percent rally this week, sources said.
"It's been a strong month, strong quarter, and a strong week so at the end of the day, we're above last week's close which is fairly impressive at these higher levels," said one Comex floor dealer. Copper for May delivery finished the day down 2.15 cents at $2.4630 lb on the New York Mercantile Exchange's Comex division, after climbing to yet another life-of-contract peak at $2.5110.
Spot April lost 1.55 cents at $2.4880, after setting an all-time record peak for the Comex spot contract at $2.5330 a lb. Comex final copper volume was estimated at 20,000 lots, against on Thursday's official count at 13,309 lots.
Quarter and month-end fund buying were seen as a partial factor in the copper market's rally to successive highs this week. Mo Ahmadzadeh, president of Mitsui Bussan Commodities (USA) Inc, said there may have been a little bit of excessive exuberance on the prospect of new quarter fund activity.
"As a result, the market overtook itself and some of the constituency of bulls decided they were better taking their money off the table," Ahmadzadeh said, adding that he believed some of the bulls will come back into the market next week, waiting to see if any more follow-through buy-stop orders get triggered.
Traders noted the market received an initial boost on Friday following overnight reports that Collahuasi, Chile's 400,000 tonne-per-year copper mine, suffered a breakdown of a concentrate mill.
Man Financial reported that 40 percent of production could possibly be sidelined for a few weeks.
This newest supply concern comes on top of the now eight-day strike at Grupo Mexico's 300,000 tonne-per-year La Caridad copper mine, possible disruptions at the Grasberg copper mine in Indonesia, and strike threats at Zambia's Kansanshi copper mine.
Edward Emir, metals analyst with Man Financial, noted that on the strike front, record high copper prices offered an "irresistible lure" to workers and management to reach a compromise. "Production problems will, no doubt, be addressed with the same sense of urgency given the price backdrop," he said.
On the supply side, London Metal Exchange (LME) copper warehouse inventories rose by 625 tonnes to 121,925 on Friday, while Comex stocks were down by 506 short tons at 35,877 short tons on Thursday's daily data.
Shanghai warehouse data showed inventories had fallen 2,311 tonnes to 32,097 tonnes for the week ended March 30. Warehouse stocks at these three major exchanges stood at 189,899 tonnes, equivalent to about 3.5 days of global usage.
Three years ago, LME stocks alone were at 800,000 tonnes. LME three-month copper slipped on late profit taking, ending at $5,390 a tonne, down $25 from Thursday's kerb close at $5,415. Electronic trade, copper peaked at $5,510.
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