Copper retreats from 8-year peak on profit-taking

LONDON: Copper prices slipped on Monday after earlier hitting near eight-year highs as profit-taking on long positions triggered by data showing copper imports in top consumer China fell was reinforced by a firmer dollar.

Benchmark copper on the London Metal Exchange tradec down 1.1pc at $7,672 a tonne in official rings.

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."

IMPORTS: 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 9.2pc from 618,108 tonnes in October, but up 16.2pc from November 2019.

DOLLAR: A rising U.S. currency makes dollar-denominated metals more expensive for holders of other currencies, which could subdue demand and prices.

STOCKS: Part of the reason behind higher copper prices are stocks in LME registered warehouses, which at 150,125 tonnes are down nearly 20pc since the middle of October.

Cancelled copper warrants - metal earmarked for delivery - at more than 40pc reinforce expectations that more copper will soon be leaving LME warehouses.

TECHNICALS: The relative strength index still above 75 suggests copper remains overbought.

FREIGHT: 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 U.S. and many other non-U.S. 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."

OTHER METALS: Aluminium was down 1.2pc at $2,018.5 a tonne, zinc was flat at $2,757, lead was little changed at $2,026.5, tin gained 0.5pc to $19,046 and nickel slipped 0.3pc to $16,348.