LONDON: Copper pulled back slightly from record-high levels on Thursday as traders said the panic over tight supplies that caused a price spike this week had started to ease.
Benchmark three-month copper on the London Metal Exchange was trading down 0.7 percent at USD11,410 per metric ton in official open outcry activity. It touched USD11,529 earlier in the session, within a whisker of the all-time high of USD11,540 it notched on Wednesday.
LME data on Thursday showed a further 7,775 net fresh warrant cancellations in warehouses in South Korea, following 50,725 tons of cancellations in Asia a day earlier.
The cancellations - or orders to withdraw metal from warehouses - saw the spread between the LME cash copper contract and the three-month forward blow out to a premium of around USD88 per ton on Wednesday, the highest since mid-October, indicating strong need for immediate metal.
The premium had eased to around USD66 on Thursday. “The nearby spread to March should not be that tight,” one trader said, attributing Wednesday’s spike to panic buying.
Still, on-warrant copper stocks in LME warehouses, those available for delivery, were the lowest since July at 98,500 tons. Sucden Financial said the 2025 copper market balance was still in a thin surplus, but even modest disruptions could now flip that into a deficit.
The brokerage sees the USD10,830 level as the key floor for the copper price into the end of the year. “Liquidity is expected to continue deteriorating into the holiday period. Combined with elevated speculative participation across the complex, this raises the risk of outsized or disorderly moves, particularly in thin markets where spreads are already tight,” Sucden added.
Among other metals, tin dropped 1.8percent to USD40,050 a ton, after hitting its highest since April 2022 earlier in the session, while aluminium dipped 0.5percent to USD2,884 and zinc shed 0.6percent to USD3,046. Lead nudged up 0.2percent to USD2,002, while nickel added 0.3percent to USD14,920.
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