LONDON: Copper fell on Wednesday, snapping two days of gains on concerns that the recent price rally sparked by US president-elect Donald Trump's stated commitment to higher infrastructure spending had become overstretched.
The metal, widely used in construction, leapt to its highest since June 2015 after the US election and is up 15 percent this month, its strongest monthly gain since 2009.
However, it failed to sustain a push above $6,000 a tonne. Three-month copper on the London Metal Exchange was untraded in official rings but was last bid at $5,585 a tonne, down 0.5 percent.
The Trump campaign published a paper on infrastructure plans ahead of the election, referring to prospective spending on bridges, airports and digital superhighways, but did not mention specific projects.
"Copper has had the best run over the last few weeks, but the price move has been exaggerated," said Commerzbank analyst Daniel Briesemann.
"If Trump can implement only some of the infrastructure spending plans he announced during his election campaign, it would lead to higher demand for metals, but I don't think it is enough to change the global market, so this is definitely overdone. Prices should trade much lower."
The wider financial markets showed the diverging path of US and euro zone monetary policy on Wednesday, with Wall Street breaking new ground.
The dollar, which rallied sharply after the US elections on expectation that increased fiscal stimulus under a Trump administration could prove inflationary, was marginally higher but short of its post-election peak.
Copper inventories in LME warehouses declined again on Tuesday, data from the exchange showed, falling 2,875 tonnes to their lowest since mid-August.
"LME copper inventory continues to fall, with total inventory standing at 242,275 tonnes," ING said in a note. "This is down from this year's peak of 379,175 tonnes at the end of September."
Aluminium was down 0.1 percent in official trading at $1,759 a tonne. Reuters technical analyst Wang Tao said on Wednesday that the metal could test resistance at $1,767 per tonne, a break above which could take it to the next resistance at $1,781.
Diversified miner Rio Tinto said on Wednesday that it had agreed to sell Alcan Aluminium UK to two members of energy and metals group GFG Alliance for $410 million.
Lead was flat in official trading at $2,192 a tonne, while zinc, untraded in official rings, was last bid down 0.4 percent at $2,591. Zinc hit its highest in nearly seven years earlier this month and has surged more than 60 percent this year on the back of supply concerns.
Elsewhere, nickel was untraded in official rings and was last bid down 1 percent at $11,260, while tin was up 0.8 percent in official trading at $21,210.
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