Copper rushed towards a record high on Wednesday, nearing $10,000 a tonne before losing momentum, but solid manufacturing data that pointed to higher demand for the industrial metal suggested gains further ahead. Three-month copper on the London Metal Exchange ended at $9,945 a tonne, flat with Tuesday's close. It earlier hit a record of $9,988.25.
But trading volumes were slim, just above half the level seen on Tuesday, as the Lunar New Year week-long holiday started in China. Copper gained more than 60 percent since last June when markets tumbled, fearing sovereign default in eurozone countries such as Greece.
"Do I think that copper will move upward through $10,000? The answer is yes," said Dennis Gartman of The Gartman Letter. "The trend is clearly upward; stockpiles are not excessive and the global economy is still for the better, not the worse. All of these things shall argue for stronger copper prices even still."
The euro retreated from a 2-1/2-month high against the dollar on Wednesday as signs of dissent over a eurozone rescue plan and unrest in Egypt caused some investors to take profits on its recent rise. A more robust dollar makes copper more expensive for holders of other currencies. Given the solid fundamental outlook for copper with constrained supply and a recovery in demand, consensus remains for higher prices.
"Copper is probably going to hit $10,000 before consolidating a bit. The macro data this week was very, very bullish," said analyst Andrey Kryuchenkov at VTB Capital. HSBC's China Purchasing Manager Index data on Tuesday showed stronger growth in the country's manufacturing sector, followed by figures showing an acceleration in manufacturing in the eurozone and in the United States, which expanded at its fastest pace in nearly seven years. Copper earlier led strong gains across the broader base metals complex, with tin hitting a record high, nickel touching its highest since May 2008, zinc at a 10-week high and aluminium near its highest since September 2008.
Nickel finished at $28,000 from $27,950, aluminium was at $2,525 from $2,551. Benchmark lead ended at $2,560 from $2,535 and zinc at $2,475 compared with $2,472. Tin, which hit a record high of $30,790 earlier closed at $30,650, up from $30,155 on Tuesday. "The tin market is driven by supply concern in Indonesia," Kryuchenkov said.
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