(Feb 3): Copper rebounded following a sharp retreat from a record high, as a global metals selloff that was led by silver and gold eased.
Contracts rose as much as 2% to US$13,148.50 a tonne, recuperating from a 15% plunge from a record high hit last Thursday (Jan 29). Other industrials on the London Metal Exchange and precious metals also clawed back some losses.
Copper’s advance came on signs of dip-buying from investors in China, the top consumer of the metal. Fabricators and manufacturers in the country also returned after weeks out of the heated market, as they replenished stocks ahead of this month’s Lunar New Year holiday starting Feb 16.
Investors have been piling into metals amid doubts about the US dollar and a shift away from currencies and sovereign bonds, driving frenzied price rallies across the commodities complex in January.
“However, the drivers for further price increases have become somewhat unclear,” said Li Xuezhi, head of research at Chaos Ternary Futures Co, referring to copper. “Expectations of a loose US monetary environment are now more uncertain. The risk of a squeeze on the LME has also declined, along with the narrowing of the COMEX/LME spread. As a result, short-term upside momentum has weakened.”
See also: Tin’s rapid rally crashes to a halt after SHFE probes traders
Still, copper prices are expected to stay elevated in the long term, Li added, supported by mine disruptions across the world.
Copper was up 0.5% to US$12,951 a tonne on the LME as of 10.48am in Shanghai while gaining 3.6% to 102,130 yuan a tonne on the Shanghai Futures Exchange. Tin climbed 5% and nickel increased 2% on the LME.
Uploaded by Arion Yeow
