LONDON: Copper prices pushed higher on Tuesday as speculators resumed their buying spree, but hovered well below record highs hit in the previous session as some investors were wary about end-users holding back purchases in a buoyant market.
Benchmark three-month copper on the London Metal Exchange gained 2.1percent to USD12,475 a metric ton in official open-outcry trading, having hit a record of USD12,960 on Monday.
Copper got a boost as US speculative funds resumed buying when the US market opened, a trader said, amid renewed risk-on sentiment in financial markets, with European shares hitting record highs after a subdued session in Asia.
LME copper has surged 43 percent this year, lifted by worries about mine disruptions constricting supply, a weaker dollar and heavy buying by speculators. “Base metals are likely to remain headline- and flow-driven, with the upside vulnerable to profit-taking until liquidity improves in early January,” analysts at Sucden Financial said in a note.
Copper prices in China declined as weaker Chinese demand weighed on the market. The most-traded contract on the Shanghai Futures Exchange closed daytime trading down 2.4 percent at 98,090 yuan (USD14,031.50) per ton. The Yangshan copper premium, a gauge of Chinese appetite for imported copper, declined to USD53 a ton on Monday, down from USD55 previously but still an improvement from below USD40 since mid-October.
LME nickel jumped 5.3percent in official activity to USD16,650 a ton, boosted by short-covering amid concerns about reduced output from top producer Indonesia. It touched an intraday peak of USD16,710, the strongest since March.
The Indonesian government plans to cut mining output quotas in order to support commodity prices, a minister said on Tuesday. The most-active nickel contract in Shanghai climbed 3.9 percent to 132,390 yuan a ton, after touching a nine-month high of 134,480 yuan.
Among other LME metals, aluminium rose 0.9 percent to USD2,977 a ton, zinc gained 1.3percent to USD3,128, lead advanced 1percent to USD2,025 and tin climbed 2 percent to USD41,550.
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