Fresh trade and institutional investor selling pushed London Metal Exchange copper back into negative territory after an initial move higher, with only zinc holding on to gains, analysts said Wednesday.
Technical tightness added to enduring fundamental strength in the zinc market, pushing the cash-to-three month spread out to $52.50 a metric ton backwardation, up from $34/ton Monday.
Prices rallied to a near two-week high of $4,435/ton, basis three-month delivery, up 3.5% on the previous PM kerb, though copper's rally faltered before the close trimming some gains.
Trade was fairly active on the LME Wednesday ahead of the long Thanksgiving weekend in the U.S., analyst Roy Carson at Triland said.
LME prices rose in early trade following a positive close above some moving averages, a weaker dollar against the euro and pre-Thanksgiving short-covering.
LME copper stocks fell by 675 tons to 157,250 tons while canceled warrants rose to 13.08% from 11.22%, helping prices to rise to a near two-week high of $7,080/ton, Carson said.
However, lack of follow-through buying and fresh selling pressure towards the close wrongfooted local long-position holders as prices failed to hold on to the $7,000/ton level, he added.
"Next week will be key for copper's near-term direction when traders return from the long weekend. Overall bearish sentiment still appears to be prevalent," analyst Michael Skinner of Standard Bank said.
In the news, the World Bureau of Metal Statistics reported a 228,000 tons surplus for the copper market during January-September, up from 88,000 tons surplus for the first eight months of the year.
LME aluminium benefited from copper's early rise and proved resilient to trade selling pressure to end only marginally down on the day, traders said.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Tuesday PM kerb
Copper 6895.00-6905.00 Dn 84.00
Lead 1532.00-1533.00 Dn 10.00
Zinc 4350.00-4360.00 Up 65.00
Aluminium 2673.00-2675.00 Dn 4.00
Nickel 31150.00-31200.00 Dn 145.00
Tin 9925.00-9950.00 Dn 20.00
豫公网安备41010502003434号