London copper eased on Monday while prices in Shanghai hit a record high as fears of tight supply countered demand outlook uncertainty.
Three-month copper on the London Metal Exchange dipped 0.5% to $9,036 per metric ton by 0709 GMT, while the most-traded May copper contract on the Shanghai Futures Exchange closed up 0.6% at 72,830 yuan ($10,118.37) a ton.
SHFE copper hit a record high of 73,440 yuan earlier in the session, buoyed by potential output cuts by smelters in top refined copper producer China.
However, copper inventory in warehouses tracked by SHFE climbed to 286,395 tons last week, the highest since April 2020, as consumption in top consumer China remained flat.
“Expectations for production cuts may make copper prices stronger in the short term, but fundamentals are actually weak,” Jinrui Futures analysts said in a note.
“Consumption has returned at a slow pace, and the reality is that inventories continue to increase.”
China’s industrial output climbed an annual 7% over January and February to beat expectations, while retail sales rose 5.5% from a year earlier.
Hot money pushes copper to new highs
But real estate remained a worry as property investment in the same period fell 9% - albeit at a slower pace compared with December.
LME aluminium eased 0.2% to $2,269 a ton, nickel fell 0.7% to $17,950, zinc eased 0.1% to $2,557.50, lead dropped 0.7% to $2,115.50 and tin edged down 0.2% at $28,615.
SHFE aluminium rose 0.3% to 19,275 yuan a ton, tin jumped 1.8% to 228,330 yuan, while nickel fell 0.5% to 139,950 yuan, zinc eased 0.4% to 21,340 yuan and lead lost 0.2% to 16,255 yuan.
China’s primary aluminium output in the first two months of 2024 climbed 5.5% to 7.1 million tons from a year earlier, official data showed.
Aluminium producers in Yunnan are also ramping up production thanks to better power availability.
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