LONDON: Copper slipped on Monday after touching a new record peak as bullish investors who recently entered the surging market became nervous about a possible correction.
Three-month copper on the London Metal Exchange climbed to an all-time high of $10,747.50 a tonne during Asian trading after first breaking through a decade-old record on Friday.
Gains had been propelled by investors joining a rally that had already seen year-to-date gains of nearly 40% and some industrial users who had given up waiting for lower prices.
Copper, which had also hit a record high in Shanghai, gave up its gains in European trading and was down 0.4% at $10,374 a tonne by 1600 GMT.
The move followed a retreat by other risky assets such as equity markets and oil.
“What we’re seeing this afternoon is recently established longs getting nervous, not having such a big pain threshold and backing out at the first sign of trouble,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“And with these kind of high numbers, there’s a very strong temptation to book profits while we wait to get a firm idea about any impact on demand from this price spike.”
Bullish investors had bet that demand for copper will increase further as the world economy recovers from COVID-19 and as investments into green energy sectors ramp up, while prices were also supported by tight supply in the concentrate market.
A group of 15 key copper smelters in China have agreed to cut their purchases of raw material copper concentrate in 2021 by 8.8% year-on-year, state-backed research house Antaike said.
A union representing workers at BHP Group’s Escondida and Spence copper mines in Chile has called for a strike vote among its members after contract negotiations stalled, the union’s president told Reuters.
Other LME metals touched fresh peaks before moving lower - aluminium and zinc hit the highest in around three years while lead rose to the strongest since October 2019.
LME aluminium shed 0.3% to $2,532 a tonne, zinc slipped 0.9% to $2,987, lead dropped 0.9% to $2,215.50, tin dipped 0.1% to $29,780 and nickel gave up 1.9% to $17,745.—Reuters