LONDON: Copper eased away from near eight-year highs on Friday as doubts grew about how much infrastructure stimulus the new US administration will be able to deliver.
Three-month copper on the London Metal Exchange was down 0.1% at $8,169.50 a tonne by 1135 GMT, having hit $8,238 a tonne earlier in the session, its highest since February 2013.
Metals markets surged on expectations of more stimulus spending, including President-elect Joe Biden's plan to spend $2 trillion on infrastructure, after news this week that Democrats would have control of both houses of Congress.
"I think the market was just looking for positive news and the outcome of Georgia elections fits, but from a fundamental point of view it doesn't really change things," said Carsten Menke, an analyst at Julius Baer in Zurich.
Any impact on metals would not be felt for several years until infrastructure projects were rolled out while a very slim majority in the US Senate lessens the chance of pushing through a big programme, he added.
"Looking at copper positioning on the futures market, a lot of good news is already priced both in terms of the recovery outlook and expectations of a weakening US dollar."
Prices are likely to pull back below $8,000 over the next three months with $7,500 a fair value price, Menke said.
In China, the most-traded February contract on the Shanghai Futures Exchange hit a more than nine-year high before closing at 60,310 yuan a tonne, up 1.9%.
"Copper prices have gone way too far from fundamentals," said China-based He Tianyu of CRU Group.
He also said copper demand from top consumer China in January-March 2021 could slow from the previous quarter due to the Chinese New Year holiday and cold weather that could dampen activities in the construction and infrastructure sectors.
Zinc inventories in ShFE warehouses jumped 22.5% to 35,008 tonnes, weekly data showed, bouncing from the lowest levels in a year in last week's numbers.
Zinc was the biggest decliner on the LME, falling 1.1% to $2,856 a tonne.
LME aluminium fell 0.3% to $2,029.50 a tonne, nickel declined 1% to $17,925, lead dropped 0.6% to $2,022 and tin added 0.1% to $21,120.