LONDON: Copper eased on Friday as some investors questioned whether recent gains were exaggerated and not fully supported by supply and demand fundamentals. Benchmark copper stormed to $7,000 a tonne on Wednesday, its highest in 28 months and up more than 50% since late March, partly owing to rumours that China would soon announce a stockpiling plan.
"There's fundamental support for the copper market, but does that justify $7,000? I don't think so, it's more at the upper end of what the fundamentals justify," said Carsten Menke, analyst at Julius Baer in Zurich.
"But the downside should likewise be limited ... People still think the Covid pandemic could cause supply disruptions."
Three-month copper on the London Metal Exchange (LME) was down 0.7% at $6,874 a tonne by 1600 GMT and set for a 2% weekly gain.
"We are now neutral to bearish towards prices in Q4 as technical indicators suggest the metal price rally is overextended," Fitch Solutions said in a report.
Wider financial markets were in a tight range as traders awaited a breakthrough in economic stimulus talks in Washington. LME zinc shed 0.9% to $2,554.50 a tonne after touching $2,587 on Thursday, its strongest since May 2019.
"We have noted CTA buying of late being met by a producer offer," Alastair Munro at broker Marex Spectron said in a note, referring to Commodity Trading Advisor funds.
China's securities regulator on Friday said that it had approved an international copper futures contract for launch on Nov. 19. China reverted to being a net aluminium exporter in September, official data showed, as the price gap between foreign and domestic metal narrowed, making shipments from overseas more expensive and reducing import volumes. LME aluminium dipped 0.2% to $1,842.50 a tonne, nickel shed 0.7% to $15,710, lead lost 1.7% to $1,781 and tin dropped 1.5% to $18,405.
Comments
Comments are closed.