LONDON: Copper prices fell on Monday after investors and traders finished rolling forward positions ahead of a contract expiry this week.
Three-month copper on the London Metal Exchange (LME) was down 0.7% at $9,410 a metric ton in official open-outcry trading, having hit its strongest in three months on Friday at $9,684.50.
Traders scrambled to cover short positions on Friday ahead of the expiry of contracts on Wednesday, pushing up LME copper and triggering a sharp move in a key spread.
Much of the activity on Friday was rolling positions forward from the expiring February contract to March, traders said. “After the manic Feb/March rolls on Friday, the market calmed down this morning,” said Robert Montefusco at broker Sucden Financial. LME copper was also pressured by technical selling after breaking below the key 200-day moving average, a bearish signal, he added.
The spread between the cash LME copper contract and benchmark three-month futures spiked to a premium on Friday for the first time in 19 months, surging to as much as $249 a ton. On Monday it flipped to a discount of $75.
Worries that US President Donald Trump may impose tariffs on copper has inflated COMEX copper futures in recent months, with the premium of the US May contract over LME at around $860 per ton on Monday, down from a record peak above $1,100 last week.
Trump on Friday kept alive his drumbeat of tariff threats, saying levies on automobiles would be coming as soon as April 2. The dollar was hovering near a two-month low while European defence and aerospace stocks surged as the region’s top political leaders called for an emergency summit on the Ukraine war amid growing US calls to boost military spending.
Among other metals, LME aluminium lost 0.4% to $2,626 a ton in official activity, zinc rose 0.2% to $2,849, lead added 1.1% to $2,004, tin eased 0.3% to $32,575, and nickel shed 0.8% to $15,350.
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