LONDON: Copper prices fell on Monday after investors and traders completed rolling forward positions ahead of a contract expiry this week.
Three month copper on the London Metal Exchange (LME) lost 0.9% to $9,393 a metric ton by 1040 GMT, having hit its strongest in three months on Friday at $9,684.50.
Traders scrambled to cover short positions on Friday ahead of expiry of contracts on Wednesday, pushing up LME copper and triggering a sharp move in a key spread.
Much of the activity on Friday was rolling positions forward from the expiring February contract to March, traders said.
“After the manic Feb/March rolls on Friday the market calmed down this morning,” said Robert Montefusco at broker Sucden Financial.
LME copper was also pressured by technical selling after breaking below the key 200-day moving average, a bearish signal, he added.
Copper hits three-month high on China prospects and weaker dollar
The spread between the cash LME copper contract and benchmark three-month futures spiked to a premium on Friday for the first time in 19 months, surging to as much as $249 a ton on Friday, but flipped on Monday to a discount of $50.
Worries that U.S. President Donald Trump may impose tariffs on copper had spurred traders and investors to buy copper on the U.S. COMEX exchange and sell on the LME.
The premium of COMEX copper over LME rose to $1,002 a ton on Monday from $913 on Friday.
Among other metals, LME aluminium lost 0.6% to $2,622 a ton, zinc was little changed at $2,842, tin eased 0.7% to $32,445, nickel shed 0.4% to $15,410, while lead added 0.8% to $1,999.50.
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