LONDON: Copper edged down on Tuesday from the previous session's multi-year peak, but strong demand and forecast supply shortages are expected to keep prices high. The loss of price momentum mirrored global stock markets, where the rapid gains of recent weeks have slowed. The dollar also halted a run of weakness that had helped metals by making them cheaper for non-US buyers.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $7,694 a tonne at 1720 GMT. On Monday it touched $7,800, its highest since March 2013, having increased in value by almost $3,500 a tonne since March this year and $1,000 in the past month alone.
"We must be close to the top," said independent analyst Robin Bhar. Bhar said some investors were taking profits but he expects looming supply shortages to keep copper on an upward trend.
"It's difficult to see how copper could close above $8,000 this year, but next year I'm sure it will," he said.
A strong start for global equities this month has triggered some "sell" signals at major investment banks, raising the chances that the run to record highs is about to pause. Congress will vote this week on a one-week stop-gap funding bill to provide more time for lawmakers to reach a deal on Covid-19 relief.
Plans by US President-elect Joe Biden to spend $2 trillion on infrastructure are expected to underpin metals prices. A new $708 billion economic stimulus package was announced by Japan on Tuesday.
The eurozone economy posted a record quarterly rise in the summer and German investor sentiment soared more than expected in December. China's production of zinc and lead rose in November while tin production fell, research house Antaike said on Tuesday. Indonesia's November tin exports rose from October levels. LME aluminium was down 1% at $1,997 a tonne, zinc was up 0.7% at $2,805, nickel rose 0.3% to $16,425, lead gained 1% to $2,097 and tin was up 0.2% at $19,150.
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