LONDON: Copper prices retreated on Tuesday in cautious trade ahead of the U.S. jobs data as well as year-end thinning liquidity.
Benchmark three-month copper on the London Metal Exchange fell 0.6% to $11,592 per metric ton by 0943 GMT. It hit a record high of $11,952 on Friday on worries about tight supply.
With thin liquidity and little fresh fundamental direction, price swings in base metals are becoming increasingly exaggerated, leaving the complex vulnerable to abrupt moves into year-end, analysts at Sucden Financial said.
The metal, used in power and construction, is up 33% so far this year, heading for the biggest yearly growth since 2009, due to several mine disruptions, outflows to stocks in the U.S. and expectations of future soaring demand from the AI data centres and the energy transition.
“It’s really the supply side issue that we are seeing this year as we expect this year’s surplus to swing to the market deficit next year,” said WisdomTree commodities strategist Nitesh Shah.
“Demand maybe muted now but it is more about the expectations that copper is going to benefit as the world electrifies,” he added.
The Yangshan premium, an indicator of Chinese appetite for copper imports, has stabilised this week at $42, its two-month high.
Among other LME metals, aluminium rose 0.4% to $2,876.50 a ton. Daily LME data showed that on-warrant aluminium stocks in the LME-registered warehouses fell to 452,600 tons after fresh cancellation of 32,025 tons in Malaysia.
Adding further support from the supply side, Australia’s
South32 said it would place the Mozal aluminium smelter in Mozambique under care and maintenance by March after failing to secure a power deal with the government.
LME lead gained 0.2% to $1,944 after hitting $1,937.5 for its lowest since May, while zinc dropped 1.5% to $3,048.50. Both metals saw major deliveries to the LME stocks, mainly in Singapore.
Nickel was down 0.2% at $14,310 after hitting its eight-month low of $14,235 on Monday, while tin lost 0.6% to $40,720.
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