Copper stumbles on worries over HK protests

Copper and other base metals prices retreated on Wednesday, shaken by protests in Hong Kong and expected retaliation by Washington against top metals consumer China.
Hong Kong police fired pepper pellets on Wednesday to disperse protesters unhappy with national security legislation proposed by Beijing, prompting US President Donald Trump to announce that he is working on a strong response.
Global stock markets and oil prices also fell, offsetting optimism about the reopening of the world economy.
"It's raising concerns for industrial metals, as if we weren't dealing with enough problems already, that's adding another layer to the uncertainty," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"My gut feeling tells me that we've more or less priced in the good news and there's the risk of something not going according to plan with all these reopenings."
Three-month copper on the London Metal Exchange (LME) slipped 1.6% to $5,278 a tonne by 1600 GMT.
LME copper touched a 10-week peak last Thursday of $5,464 a tonne, having rebounded 25% since hitting a 45-month low on March 19.
Saxo Bank's Hansen said that LME copper appeared to be trapped in a range of about $5,150 to $5,350 a tonne.
Another reason for weaker LME prices was that arbitrage with China was no longer profitable, Alastair Munro of broker Marex Spectron said in a note. "The arb windows have closed, making it unattractive to buy LME."
The discount of cash copper to the three-month contract rose to $34.75 a tonne by Tuesday's close, its highest since October last year, indicating healthy supplies of metal in LME warehouses. It was last quoted at $33.50.
LME aluminium stocks climbed to 1,493,775 tonnes, the highest level since May 2017 and up 60% over the past 10 weeks, LME data showed on Wednesday.
But LME aluminium shrugged off news of a rising surplus, gaining 0.4% to $1,525 a tonne after touching a 10-week high of $1,534.
LME zinc slid 2.9% to $1,924 after touching a three-week low of $1,909.50, lead shed 3.2% to $1,633, nickel dropped 1.8% to $12,125 and tin was down 0.9% at $15,285.