Copper prices traded a shade lower on Monday after a rise in Shanghai warehouse stocks prompted Chinese investors to delay purchases until the price of the industrial metal which hit a record high on Friday falls further.
A lack of Chinese demand more than offset supply concerns from labour strikes in North America, where workers at Group Mexico have planned industrial action in support of strikers at troubled US subsidiary Asarco.
But the strikes would lend support to copper in the next few days, some analysts said, especially as there is still almost a week to go before Asarco and the union start talking again.
Copper for delivery in three months on the London Metal Exchange, was trading at $3,567/$3,572 a tonne on Monday about 1 percent below a record high of $3,600 struck on Friday.
The three-month contract closed on Friday at $3,572. "Shanghai prices are under pressure as stocks here have risen," said a trader in the Chinese City.
"Most Chinese buyers think that the market needs adjustment." The most-active October copper contract on the Shanghai Futures Exchange was down 110 yuan from Friday's settlement to 34,150 yuan a tonne.
Data released on Friday showed copper stocks at the Shanghai Futures Exchange's warehouses rose almost 15 percent to 39,386 tonnes in the week to August 4 from 34,387 tonnes a week.
"The market has gone too high at the moment. I don't think any buyer in Japan is interested at these prices," said one Tokyo-based trader. The Japanese yen weakened broadly on Monday as Japan's parliament appeared increasingly likely to vote down postal reform bills that could prompt Prime Minister Janitor Koizumi to call a snap election. The dollar bought around 112.40 yen, up 0.4 percent from the level in late US trade on Friday. A stronger US currency makes dollar-denominated commodities expensive to holders of other currencies and makes metals a less attractive investment tool.
Aluminium was at $1,881/$1,885 a tonne, compared with London's close of $1,885.50. Nickel was at $14,150/$14,250 against $14,225. Zinc was at $1,286/$1,291, compared with $1,290, while lead was at $853/$858 against London's close of $857. The world's top zinc miner, Canada's Tech Commence Ltd, and striking workers at its large zinc and lead smelter in British Columbia will meet again this week in an attempt to end the work stoppage, a company official said. Tin was at $7,100/7,150 a tonne.
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