Copper halted a two-day rally with a softer close on Thursday, as prices continued to dawdle beneath recent record peaks and investors priced in a potential dry-spell in Chinese purchases in the coming weeks. Since hitting historic peaks at $9,754 per tonne in London and $4.4980 per lb in New York during the first week of the New Year, price momentum has stalled as macro-economic uncertainties sapped risk sentiment in the high-flying industrial metal.
Copper's subdued price action this week opened the door for investors to park their cash into other high-flying markets, analysts said. "I think there is a little bit of disfavour with some of the metals because they have had some good moves and other markets seem to have more going for them in terms of supply/demand," said Steve Platt, futures analyst with Archer Financial Services in Chicago.
COMEX copper for March delivery dropped 3.45 cents to settle at $4.3770 per lb, near the bottom of its $4.3585 to $4.4255 session range. Volumes were relatively active with 34,450 lots traded by 2 pm EST (1900 GMT), about 10 percent above its 30-day average, according to Thomson Reuters preliminary data.
US commodity markets will be closed on Monday, January 17, for the Martin Luther King Jr. holiday. Trading will resume on Tuesday. The tentative tone in copper this week was also attributed to perceptions of a softer Asian market presence in front of the Chinese New Year, set to begin on February 3. "The activity of Chinese traders will probably decline over the course of the month," said Daniel Brebner, an analyst at Deutsche Bank, adding demand may pick up after the New Year.
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