Three-month copper on the London Metal Exchange was down 1.3% at $9,698 a metric ton in official rings. It touched $9,988 a ton on Monday, testing the $10,000 mark
Copper prices retreated on Tuesday on profit-taking by funds and hedging by producers after a speculation-led rally sent the market to a two-year high.
Three-month copper on the London Metal Exchange was down 1.3% at $9,698 a metric ton in official rings. It touched $9,988 a ton on Monday, testing the $10,000 mark.
LME copper is still up 9% this month.
“Metals prices were rising far too quickly. The funds are taking profit and people are trying to hedge,” said Dan Smith, head of research at Amalgamated Metal Trading.
Mining companies hedge by selling their production in advance when prices rise.
Tin plummeted as much as 8.9% to $31,400 a ton after touching a 22-month high on Monday. It last traded down 6.2% at $32,345 a ton.
Aluminium, meanwhile, fell 3.2% to $2,585 a ton.
The LME aluminium cash price traded at a premium of $27 a ton to the three-month price, a condition called backwardation that typically signals tight supply. .
Nearly 70%, or 345,300 tons, of aluminium stocks in warehouses monitored by the LME are earmarked for delivery, exchange data showed, with most of the cancelled material in Asia.
“We have not seen this cash to three-month backwardation in aluminium for a while. But it is more an artificial tightness with long and shorts battling to get hold of aluminium,” Smith said.
Traders could profit by taking Russian aluminium from the LME and returning it at a later date to benefit from recent rule changes to comply with the latest U.S. and UK sanctions in response to Russia’s invasion of Ukraine.
LME nickel dropped 3.8% to $18,985 a ton, zinc shed 2% to $2,775 and lead was down 1.1% at $2,145.
Cancelled lead warrants last week climbed to 129,650 tons, or 48% of the total, the highest level since June 2013.
Source: Zawya
