Copper declines

Copper fell from an earlier record high on Thursday as investors worried about demand in China ahead of key trade data from the top metals consumer, offsetting bullish signs of market tightness. Benchmark copper for three-month delivery on the London Metal Exchange closed at $8,940 a tonne, from $9,015 at the close on Wednesday.
Prices of the metal used in power and construction earlier traded as high as $9,091, up more than 20 percent year-to-date. "Trade should remain choppy here because we are at historical highs," VTB Capital analyst Andrey Kryuchenkov said. "Tin and copper are fundamentally looking quite good in the long run," he said, citing market tightness.
But investors were nervy ahead of Chinese imports and exports data due early on Friday, following recent concerns that the country could further tighten its monetary policy and lose some appetite for copper.
"Refined imports in November could easily show another significant fall as the Chinese market reacts to high prices and an unfavourable arbitrage," said David Thurtell, an analyst at Citi. Fanning concerns about market tightness, ETF Securities said this week it would launch the first physically backed exchange-traded products (ETP) for base metals from Friday.
The UK-based company will initially offer products backed by physical copper, nickel and tin. Supply shortages have been a major factor behind the surge in copper prices in recent months, due to a combination of falling ore grades, labour problems and project delays.
A trend of falling LME inventories this year has fuelled supply concerns. On Wednesday, copper stocks slipped 800 tonnes to 349,450 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes hit in mid-February. Worries about supplies in the near term have pushed the metal into a $35 a tonne backwardation - premium for cash material over the three-m1onth contract - compared with a discount of $20 a tonne in late October. Investors also eyed a dominant position controlling between 50 and 80 percent of cash warrants for copper, subject to LME lending guidance. There was also a dominant position of 50-80 percent on tin.
Aluminium closed at $2,338 versus $2,375, after earlier hitting a one-month high at $2,408. LME stocks for the metal, used in transport and packaging, fell 3,125 tonnes to 4.27 million tonnes. Steel-making ingredient nickel was at $23,600 from $24,000, after earlier hitting a one-month high at $24,400, while battery material lead was at $2,405 from $2,405. Zinc closed at $2,300 a tonne from $2,314, while tin was at $25,895 from Wednesday's closing bid of $25,600. Tin cancelled warrants - material already earmarked for delivery - were up 340 tonnes, standing at more than 11 percent of total inventories at 15,755 tonnes.