LONDON: Copper prices slipped on Friday as investors took profits on long positions ahead of the Christmas break as growing doubts about demand growth in top consumer China reinforced the idea that recent gains were overdone.
Benchmark copper on the London Metal Exchange was untraded in official rings, but bid down 0.4 percent at $5,495.5 a tonne. That compares with a one-month low of $5,419.5 a tonne hit on Thursday.
However, the metal used widely in power and construction is on track for its largest annual rise since 2010, although analysts note that prices have come from a low base. So far this year, copper is up 17 percent, much of that rise came after Donald Trump won the US Presidential election.
"US copper demand hardly matters on a global scale -- it's about 1.8 million tonnes in a 22 million tonne market. Even if there is a push on US infrastructure, how is copper needed if you are talking about bridges and roads? It's not a game changer." said Julius Baer analyst Carsten Menke.
"Some China data has been better of late, but look at the property market weekly volumes sales are reported to have turned negative in some cities, so property could be a headwind next year."
Last week, China said it would strictly limit credit flowing into speculative property buying in 2017. Analysts also doubt China, which accounts for nearly half of global copper consumption, will try to stimulate growth and demand next year, to the extent it did this year.
"China's economy is currently reaping the benefits of earlier policy loosening, but with no new stimulus on the cards and steps being taken to rein in credit growth, activity looks set to slow next year," Capital Economics said in a note.
"As such, we think prices of industrial metals may ease back as optimism fades. However, mine supply of a number of metals, including lead and zinc, is now falling, following years of underinvestment in the sector." Expectations of zinc market deficits this year and next pushed the price up to a nine-year high of $2,985 a tonne last month, more than double the January low.
Lead hit $2,576.50 late in November, its highest since August 2011.
It traded down 0.7 percent to $2,110 and zinc was bid 1.1 percent lower at $2,600 a tonne.
Aluminium slipped 0.2 percent at $1,719, tin rose 0.3 percent to $21,000 and nickel lost 1.2 percent to $10,600 a tonne.
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