Copper loses ground on fears of Chinese commodities price caps
- Benchmark copper on the London Metal Exchange (LME) shed 0.4% to $8,893.50 a tonne in official trading.
- Copper has gained about 30% over the past five months, having touched a 9-1/2 year peak of $9,617 in late February.
LONDON: Copper prices slipped on Monday on worries that top metals consumer China wants to put a lid on surging commodity prices to head off potential inflation.
Concern about faltering demand and rising copper inventories also weighed on the market.
Benchmark copper on the London Metal Exchange (LME) shed 0.4% to $8,893.50 a tonne in official trading.
Copper has gained about 30% over the past five months, having touched a 9-1/2 year peak of $9,617 in late February.
Shanghai copper declined 1.8% to 65,690 yuan a tonne.
"The real focus right now is those very high PPI (producer price index) numbers, both from China and the US, and China potentially implementing measures to curb commodities-led inflation," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Chinese factory gate prices (PPI) in March rose at their fastest annual pace in nearly three years, data showed on Friday.
Chinese Premier Li Keqiang emphasised the need to strengthen market regulation of raw materials to ease the cost pressure of enterprises amid rising global commodities prices, China's official Xinhua news agency reported on Sunday. (https://bit.ly/2PV89K7)
Metals markets had welcomed US President Joe Biden's plan to spend $2.3 trillion to improve US infrastructure, but Republicans have been wary.
"I think there's also quite a lot of uncertainty related to whether Biden will be able to get his infrastructure bill through," Hansen said.
LME copper inventories touched their highest in five months on Monday, having more than doubled since the start of March.
Also weighing on the market were indications of weak demand in China as the Yangshan copper premium fell to $51 a tonne, its lowest since Nov. 20.
Russia's Nornickel said on Monday that it would fully restart operations this month - earlier than previously expected - at one of two major mines hit by flooding.
LME nickel slid 2.2% to $16,262 a tonne in official activity.
LME aluminium added 0.2% to $2,268.50 a tonne, lead dropped 0.4% to $1,971, zinc shed 1.7% to $2,782.50 and tin was barely changed at $25,757.
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