LONDON: Copper prices fell on Wednesday as funds continued to cash in near the $10,000 per metric ton mark following the sharpest rally in years.
Three-month copper on the London Metal Exchange (LME) fell 0.8% to $9,916 a ton by 1040 GMT. It touched a two-year high of $10,208 on Tuesday.
Light volumes of selling in copper from commodity trading advisers (CTA) were spotted on LME earlier, with corrections across wider commodity class including cocoa and gold, Marex’s strategist Alastair Munro said.
Support in copper price is seen at above $9,500 a ton, with investors profit-taking to cause shallow dips in copper, he said. The industrial metal of good conductivity, one of the most widely used in the world, has soared by 16% so far this year.
Trading was thin with several Asian markets, including top metals consumer China, closed for the Labour Day holiday. Copper supply rose slightly with rising inventory in Taiwan on Wednesday.
Total stocks have recovered from a three-week low in warehouses monitored by LME. Also pressuring prices are a stronger US dollar to make greenback-priced metals more expensive for buyers holding other currencies.
The dollar was close to five-month high ahead of a Federal Reserve policy decision later on Wednesday when the central bank is expected to keep its interest rates unchanged amid sticky inflation.
A higher lending cost makes commodities pricier.
LME lead slid 0.9% to $2,196.50, nickel shed 1.9% to $18,865, while tin dropped 1% to $30,885 a ton. LME zinc dropped 2.2% to $2,861.50 with supply expected to rise as Nyrstar’s Budel smelter will resume production during the week of May 13.
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