Copper prices slipped on Friday, as inventories rose, the dollar firmed and investors started to fret about demand growth for industrial metals. Benchmark copper on the London Metal Exchange traded at $7,437 a tonne in official rings from $7,490 at the close on Thursday.
The metal used in power and construction touched $7,796 a tonne on Jan. 7, the highest since August 2008. Stocks of copper in LME warehouses at 525,475 tonnes are the highest since the middle of February and more than double the level seen in July.
The pace of the rise has accelerated in recent weeks. "The upside is capped simply because even your average speculator who doesn't normally look at stocks can't help noticing the constant, constant rises," said Andrey Kryuchenkov, analysts at VTB Capital.
Analysts noted record high nickel stocks, which at 161,994 tonnes have more than doubled over the past year as supplies outstripped demand from stainless steel producers. "Nickel more than any other base metal takes account of fundamentals. It's heading up to be the worst market because the stainless steel market is in a pretty poor state," said Dan Smith, analyst at Standard Chartered.
Three-month nickel traded at $18,350 a tonne compared with $18,300 at the close on Thursday and aluminium was at $2,315.5 a tonne from $2,335. Stocks of aluminium, used in transport and packaging, at 4.58 million tonnes are within reach of record highs. But prices have been supported by financing deals, which have tied up about 70 percent of LME stocks until May at least.
Also in the spotlight are cancelled warrants - material earmarked for delivery - on aluminium stocks, which at above 251,000 tonnes is nearly 20 percent of the remaining 30 percent. "These financing deals are ongoing...This story isn't going away," a trader on the LME floor said. Battery material lead was untraded in the rings, but bid $2,460 a tonne from $2,507 on Thursday, zinc traded at $2,474 from $2,502 and tin at $18,050 from $18,450.