Shanghai copper futures ended lower on Wednesday alongside lower London prices, despite some support from Chinese traders keeping a wary eye on London fundamentals ahead of the week-long Spring Festival break. "Last week everyone thought traders would try to close out positions before Chinese New Year, in case prices fell," said an analyst with a major Chinese trading firm. "But the traders now think that London prices might rise over our holiday, because fundamentals are still strong.
Everyone who tried to sell up to now bet wrong," he added. Shanghai copper futures are up by about one-half of a percent compared with the last day of 2004, while London Metal Exchange benchmark futures have slumped 2.8 percent over the same period.
LME copper fell during open outcry trade in London on Tuesday, on expectations of a stronger dollar and a US interest rate hike. But low inventories and steep backwardation lent some encouragement to LME bulls.
But the loss was smaller than that of three-month copper futures on the LME, which fell $18 from the day before to trade at $3,061.50 a tonne on Wednesday. Shanghai cash copper prices fell more heavily than futures to 32,060-32,300 yuan on Wednesday compared with 32,400-32,700 yuan on Tuesday indicating that end-user demand has dried up ahead of the New Year.
April aluminium closed at 16,330 yuan in thin trade on Wednesday, up 10 yuan from Tuesday's close.
A total 5,490 lots changed hands, down from 6,692 lots on Tuesday. Three-month aluminium futures traded on the LME at $1,844.50 a tonne on Wednesday, down $3 a tonne from the same time on Tuesday.