Copper futures in China fell on Tuesday as investors sought to pre-empt any bigger losses in the face of a looming supply surplus. At the Shanghai Futures Exchange, January copper ended the session down 340 yuan at 66,520 yuan ($8,478) a tonne. Copper for delivery in three months on the London Metal exchange was up $5 at $7,100 per tonne.
"Some people are starting to think that there's more than enough copper out there, but the amount of trades has been very light so this thinking isn't universal," a trader said.
Copper have been under pressure recently on rising London Metal Exchange inventories, which are up by about 40 percent since mid-October, and Chinese de-stocking. London Metal Exchange (LME) nickel recoiled further after hitting a record high of $34,100 a tonne at one point on Monday. The three-month contract was last quoted at $33,300 a tonne, versus $33,500 at Monday's close.
"I wouldn't read much into such a small change in nickel, the fundamentals are very price supportive," a second trader said. Nickel notched up a new high for the third straight London session after low visible stocks and supply glitches stoked speculator interest.
"Recent high nickel prices are expected to remain in 2007," auditing firm KPMG said in a report on the Australian mining sector. London Metal Exchange stocks of the metal, used mainly to make stainless steel, rose on Monday by 588 tonnes to 6,942 tonnes but nearly 30 percent of that total was unavailable to the market.
Profit takers drove three-month zinc's $20 lowers to $4,450 a tonne. At one point on Monday, zinc revisited a record high price of $4,580 a tonne. Australian zinc miner Perkily Ltd said it was accelerating project development and exploration work to boost output on the back of firmer prices, though for the current year, production would be flat at between 130,000 tonnes and 140,000 tonnes. Last year, Perinea lifted its zinc yield by 9.2 percent.