LONDON: Copper prices fell on Friday as investors booked profits after the metal rallied to the highest in 16 months in the previous session, driven by concerns about tighter supply.
Three-month copper on the London Metal Exchange eased 0.7 percent to USD10,789.50 a metric ton by 0959 GMT. It hit USD11,000 on Thursday, moving closer to its all-time peak of USD11,104.50 set in May 2024. Investors have piled money into copper after Freeport declared force majeure at its major Grasberg mine in Indonesia at the end of September.
On Thursday, data showed that copper output from Chile’s Codelco also dropped 25 percent in August after a deadly collapse stunted output from its mine.
With concerns about tighter supply, the discount of the LME cash price to the three-month copper contract narrowed to USD20 a ton, the smallest in three months, from USD57 a month ago. However, a lack of any significant improvement on the demand side is helping to limit the rally in copper, used in power and construction. “Demand is not great for most of the industrial metals,” said BNP Paribas analyst David Wilson.
“To have a sustained bull cycle in the industrial commodities, you usually need a positive demand story.” In top metals consumer China, copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 15percent from late September, while the Yangshan copper premium, which reflects demand for copper imports, was steady at USD49 a ton, its lowest since August 19.
Lead was 0.1percent lower at USD2,028 a ton. It hit a three-month high of USD2,046 earlier in the session as LME daily data showed that 118,000 tons of the metal were marked as being prepared for delivery out of LME-registered warehouses, taking cancelled stocks to 70percent of the total.
LME aluminium fell 0.5percent to USD2,783.50, zinc rose 0.5percent to USD3,023.50, nickel was down 0.8percent to USD15,365, while tin dropped 0.7percent to USD36,760.
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