Copper falls as investors lock in gains after rally

Copper fell on Thursday as investors took profits after several sessions of gains, with a firmer dollar and sticky U.S. inflation also weighing on sentiment.

The benchmark three-month copper on the London Metal Exchange tumbled 1.52% to $13,937.50 a metric ton, as of 0713 GMT.

The contract hit an over three-month high of $14,196.50 on Wednesday, below its record high of $14,527.50 touched in January.

The most-active copper contract on the Shanghai Futures Exchange declined 1.26% to close daytime trading at 106,750 yuan ($15,730.22) a ton.

London copper had an eight-session rally, while the Shanghai contract posted six consecutive gains. Copper’s prices were supported by concerns over mine supply, tight inventories and strong demand from power grids, electrification and artificial intelligence-related infrastructure, especially from China.

Traders said that the recent run-up had left the market vulnerable to profit-taking, especially after higher-than-expected U.S. inflation data strengthened the dollar and dented expectations for near-term Federal Reserve rate cuts.

The market needs fresh catalysts for further gains, traders said.

A stronger dollar makes greenback-priced metals more expensive for holders of other currencies, while higher-for-longer interest rates can weigh on demand for industrial commodities.

The market is also watching closely how the Trump-Xi meeting, which started on Thursday, plays out.

Meanwhile, Shanghai’s most-traded nickel contract declined 1.15% to close at 144,470 yuan a ton, and the benchmark nickel in London lost 1.57% to $18,875.

The China Chamber of Commerce in Indonesia recently warned that tighter ore quotas, a revised benchmark pricing formula and heavier taxes are pushing up costs and threatening future investment in the world’s biggest nickel producer, according to a letter to President Prabowo Subianto and seen by Reuters.

Zinc was the sole metal posting gains on both the London and Shanghai bourses. The London zinc gained 1.29% and the Shanghai contract closed 0.57% higher.

A fire broke out on Wednesday at Nexa Resources’ Cajamarquilla zinc smelter in Peru, though was later brought under control.

Among other metals on the LME, aluminium declined 0.30%, lead dipped 0.04%, and tin slid 1.66%.

SHFE aluminium closed down 0.30%, lead added 0.12% and tin lost 0.66%.