LONDON: Copper prices pulled back on Tuesday after three sessions of gains, burdened by surging inventories and lacklustre demand in top metals consumer China.
Copper pared losses, however, after workers at BHP’s Escondida copper mine in Chile decided to go on strike after failing to reach an agreement with the company.
Three-month copper on the London Metal Exchange (LME) was down 0.8% at $8,959 per metric ton in official open-outcry trading, after rising 2.9% over the previous three sessions.
LME copper has shed 19% since touching a record peak of more than $11,100 a ton in May.
LME inventories extended their steep climb on Tuesday to the highest levels in nearly five years, having more than doubled over the past two months. “For copper, it’s quite a negative signal. It makes people a little nervous that there’s maybe a bigger surplus out there than we recognise,” said Dan Smith, head of research at Amalgamated Metal Trading.
Market positioning was also a factor, with some speculators selling to lock in short-term profits from the recent bounce, a trader said. “We’re trying to figure out where the floor is for copper. I sense we could see a bit more downside.
These wash-outs tend to run a long way and copper at $9,000 is not particularly cheap,” Smith said. LME zinc and lead sank after more arrivals of LME stocks, with zinc sliding 2% in official activity to $2,687 a ton and lead dropping 1.8% to $2,011.
Among other metals, LME aluminium added 0.1% to $2,308 a ton, nickel slipped 0.8% to $16,225, and tin shed 1.5% to $31,100.
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