Copper prices fell on Monday from their highest levels in nearly seven months, as subdued physical demand and a global economic downtrend weighed on prices.
Three-month copper on the London Metal Exchange dipped 0.1% to $9,173.50 a tonne by 0712 GMT, having hit its highest since June 16, 2022 of $9,257 a tonne in the previous session.
The most-traded March copper contract on the Shanghai Futures Exchange closed 0.3% lower at 68,640 yuan ($10,231.03) a tonne.
“China re-opening, supportive measures for the property market, and weakening US dollar have been driving the market sentiment in recent past,” said ANZ analyst Soni Kumari.
“Nevertheless, we are yet to see positive developments in the spot market … Copper physical premium is still falling, which signals a weak demand.
Therefore, a short-term price correction is in the cards,“ Kumari added. China’s factory activity in December shrank at the sharpest pace in nearly three years as COVID-19 infections swept through production lines across the country.
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Yangshan copper premium was at $32.50 a tonne on Friday, down from $152.50 last October.
Supply disruption in Peru helped limit the price drop, while the dollar hit a seven-month low and low copper inventories in the LME and SHFE warehouses – at 186,343 tonnes combined on Friday, or just over two days worth of global consumption.
Also in Peru, tin miner Minsur said it was temporarily suspending operations at its San Rafael mine.
SHFE tin rose as much as 5.1% to 230,270 yuan a tonne, its highest since June 21, 2022. LME tin dipped 0.3% after hitting its highest in nearly seven months in the previous session at $29,400 a tonne.
SHFE nickel slipped 1.8% to 203,250 yuan a tonne. The contract has lost 11% so far this month, on track for its worst monthly decline since June 2022. “Strong supply growth (of nickel supply) from Indonesia will remain a focus and a drag for prices,” Kumari added.
LME aluminium fell 0.3% to $2,603.50 a tonne, zinc declined 0.1% to $3,322.50 a tonne while lead was down 0.8% at $2,234 a tonne.
SHFE aluminium rose 0.5% to 18,485 yuan a tonne, zinc increased 1.3% to 24,275 yuan a tonne, and lead advanced 0.4% to 15,340 yuan a tonne.