Copper rose on Thursday in volatile trade on speculative flows and against the backdrop of falling inventories for the metal used in construction and power. Benchmark copper on the London Metal Exchange closed 1.2 percent higher at $5,495.50 per tonne after touching its highest since June 2015 at $6,025.50 per tonne on November 11.
Copper is down about 8 percent from last week's peak in a rally prompted by expectations of higher US infrastructure spending following Republican Donald Trump's election victory. Inventories on Thursday rose 2,275 tonnes to 257,875 tonnes, according to LME data, but are down 32 percent from a 2016 peak in September.
"The copper market is a bit confused right now, we had been expecting a proper correction but trading has been very volatile," ETF Securities commodities strategist Nitesh Shah said, adding that there could speculative buys. Another trader said it was "clear the usual dynamics of the market are not at play" given that a stronger dollar usually led to softer commodity prices.
But Shah said although he expected a moderate rise in prices, the metal was expensive at current levels. "I've been saying all year that copper prices should rise alongside other metals if you look at the supply deficit, but for this price reaction to happen over a few days is too much too fast," Shah said. Anglo American said it suspended its Los Bronces copper mine in Chile after protesters seized installations on Wednesday. The mine produced 402,000 tonnes of copper last year.
Executives at some of the world's major copper producers and traders said on Wednesday the global copper market will be oversupplied for at least two years, casting doubt on the chances of a prolonged rally. Elsewhere, zinc was down 0.4 percent to $2,514 per tonne in official trading rings. The metal, used mainly in galvanising steel, hit its highest level since January 2010 on Tuesday.
Aluminum ended 0.5 percent lower at $1,685 per tonne. Lead slipped 0.4 percent to $2,169.50 per tonne. Tin rose the most among the metals, up 1.6 percent to $20,200 per tonne. It fell to its lowest since October 21 on Wednesday. Nickel shed 0.8 percent to $11,240 a tonne.