LONDON: Copper prices slipped on Monday after earlier hitting near eight-year highs as profit-taking on long positions triggered by data showing a drop in copper imports by top consumer China was reinforced by a firmer dollar. Benchmark copper on the London Metal Exchange was down 0.5% at $7,721 a tonne at 1703 GMT. Earlier prices of the metal used widely in the power and construction industries touched $7,800 a tonne, the highest since March 2013.
"Copper is a crowded trade," said ING analyst Wenyu Yao. "Fundamentally Chinese demand is holding up, but by itself it is not enough to justify current price levels."
China's November copper imports fell for a second consecutive month to a six-month low.
Arrivals of unwrought copper and copper products totalled 561,311 tonnes last month, down 9.2% from 618,108 tonnes in October, but up 16.2% from November 2019.
A rising US currency makes dollar-denominated metals more expensive for holders of other currencies, which could subdue demand and prices.
Part of the reason behind higher copper prices are stocks in LME registered warehouses, which at 150,125 tonnes are down nearly 20% since the middle of October.
Cancelled copper warrants - metal earmarked for delivery - at more than 40% reinforce expectations that more copper will soon be leaving LME warehouses.
The relative strength index still above 75 suggests copper remains overbought.
Prices of industrial metals are also supported by significantly higher freight rates.
"A good part of the increase is attributable to the fact that while containers are going from China to the US and many other non-US ports, the flow going back is minimal," said ED&F Man Capital Markets analyst Edward Meir.
"So shipping lines are recouping their empty returns by billing one-way traffic at much higher rates."
Aluminium was down 1.3% at $2,018 a tonne, zinc rose 1.2% to $2,791, lead gained 2.8% to $2,084, tin climbed 0.7% to $19,095 and nickel slipped 0.2% to $16,370.
Comments
Comments are closed for this article.