Copper rally falters as producers lock in higher prices

• LME nickel prices hit their highest in nearly two weeks on Thursday but pared gains after the stocks data.
• The LME three-month aluminium price shrugged off the inventory gains to firm by 0.2pc to a bid of $1,763 a tonne in official activity.
• Copper on the London Metal Exchange (LME) had gained 6pc in little more than a week.

LONDON: Copper prices slipped on Thursday after six sessions of gains as miners hedged to take advantage of the strongest prices in nearly five months.

Benchmark copper on the London Metal Exchange (LME) had gained 6pc in little more than a week, partly on optimism over a US-China trade deal and improving economic data in both nations.

However, LME copper failed to trade in official open-outcry activity, but was bid down 0.6pc at $6,118.50 a tonne after touching $6,158, equalling the previous session's peak and its highest since July.

"We're really surprised copper has been so strong. I think it was from the rhetoric coming from Trump about China, plus we've had a lot of good data, particularly on the jobs side," said Sucden Financial broker Robert Montefusco.

"We're likely to see a lot of the producers selling up here. Late yesterday there were some upside (option) calls being sold, which was putting some pressure on the market."

SHANDONG: Also weighing on copper was news that China's Shandong Fangyuan Nonferrous Metals Group, one of the country's biggest private copper smelters, denied online rumours that it had filed for bankruptcy and said operations were running normally.

Traders said the rumours had helped to support prices this week because some investors expected shortfalls if Shandong closed.

NICKEL STOCKS: LME nickel on-warrant inventories <MNISTX-TOTAL> - material not earmarked for delivery - soared by 52pc in one day to 102,036 tonnes, the highest since Aug. 29, LME data showed.

Sucden's Montefusco said that recent inflows of nickel stocks could be linked to Chinese arbitrage activity and more deliveries are expected in the coming days.

LME nickel prices hit their highest in nearly two weeks on Thursday but pared gains after the stocks data, edging up by 0.04pc to trade at $13,855 a tonne in official rings.

ALUMINIUM INVENTORIES: LME on-warrant aluminium stocks climbed by 23,075 tonnes to 1,218,125 tonnes, the highest since March 2017, data showed.

The LME three-month aluminium price shrugged off the inventory gains to firm by 0.2pc to a bid of $1,763 a tonne in official activity.

ALUMINIUM SPREAD: LME cash aluminium moved to a discount of $8.75 a tonne to the three-month contract this week after holding at a premium for nearly a month, indicating healthier supplies in the LME system.

PRICES: LME zinc advanced 0.5pc to a bid of $2,233 a tonne in official rings, lead shed 0.4pc to a bid of $1,930 and tin dropped 1.1pc to trade at $17,100.