Copper rallied more than 40% last year, its biggest gain since 2009. — Bloomberg
LONDON: Copper slid from a record high, declining along with other industrial metals, as traders booked profits from a swift run-up in prices.
Futures for copper, nickel and zinc declined more than 2% at the close of trading on the London Metal Exchange (LME), trimming sharp gains seen over the past couple of weeks as a broad-based flood of investment in China’s domestic metals markets pushed prices up.
While many traders and investors have bullish long-term views on the outlook for copper and other metals, the speed of the rally has prompted warnings that the markets could fall just as sharply with traders taking profits.
“We are seeing a broad retreat in most markets, as is typically the case when there are oversized price moves,” Ed Meir, an analyst at Marex, said in an emailed note.
“Meanwhile, base metals analysts are scrambling to keep up with the surge we have seen of late.”
Copper rallied more than 40% last year, its biggest gain since 2009, as several major mines suffered outages and traders shipped huge volumes of metal to the United States in anticipation of possible tariffs.
Nickel also staged a blistering rally toward the end of the year. Prices notched the biggest gain in more than three years on Tuesday, with an intraday surge of as much as 10.5%.
The metal used in batteries and stainless steel has been propelled higher by risks to output in top supplier Indonesia, as well as a wave of buying by Chinese traders.
After touching a fresh 19-month high on Wednesday, prices came under pressure as profit-taking set in, said Fan Jianyuan, an analyst at Mysteel Global.
The rally was “largely driven by financial capital inflows,” but on a fundamental level, the nickel market remains in surplus, Fan said.
There was fresh evidence of continued oversupply on Wednesday, as stockpiles tracked by the LME surged by the most in six years.
Nickel settled 3.4% lower at US$17,895 a tonne on the LME as of 5:55pm London time. Copper closed 2.6% lower at US$12,899.50, as all other major metals declined on the exchange. — Bloomberg
