Shanghai copper eases

Shanghai copper futures eased nearly 1 percent on Tuesday after gaining for three straight sessions as spot premiums in the domestic market began falling and a holiday break in London capped demand. The March copper contract, the most active on the Shanghai Futures Exchange, was down 490 yuan at 57,970 yuan ($7,898) a tonne on Tuesday's close after touching 61,250 yuan in early trade.
"There is some selling in the market. Spot copper prices in China surged to 60,000 yuan level these days but investors could hardly accept it without London's catching up," said analyst Pang Ying at trading house Rongtop.
Spot copper prices in Shanghai were down 1,855 yuan, first fall in the past week, trading between 60,800 yuan and 61,100 yuan. Spot copper premiums eased to around 1,000 yuan on Tuesday, from a 1,500 yuan level on Monday.
Spot premiums in the Chinese copper market, which reached an 18-month high of 2,000 yuan last week and supported Shanghai futures markets, reflected strong demand and tight supplies during the year-end period.
Yunnan Copper Industry (Group) Co, China's third-biggest copper smelter, will cut its refined copper production by 30,000 tonnes due to maintenance, the official China Securities Journal reported on Tuesday. The company started a 45-day overhaul of a major refining system in the middle of this month and is due to finish by early February.
Jiangxi Copper Co Ltd, the largest integrated copper producer in China, will cut refined copper output by up to 30,000 tonnes in December due to repairs, a senior executive said in November. But traders expected the pressure on prices to subside within a month after imports picking up to meet domestic demands.
"Traders are importing as much as they can, therefore I believe the high spot premiums in Shanghai will ease at the end of January," a trader at an international house said. Shanghai's March zinc contract ended down 90 yuan to 18,985 yuan, while the most-traded March aluminium contract was off 2 percent, or 400 yuan, to 18,250 yuan.