SINGAPORE--London Metal Exchange copper eased slightly in Asia Thursday amid thin trade, as the market remained on edge about whether or not the metal would pull back after its recent bull run.
Traders said profit-taking on copper ahead of the Easter weekend was possible, though they said the market could easily see fresh buying and short-covering given copper's strength this week.
Three-month copper was down $74 from the London Wednesday afternoon kerb at $7,341 per metric ton as of 0645 GMT, after touching a four-month high overnight at $7,445.
Speculative profit-taking by Chinese traders was said to be behind copper's softening in Asia, but the drop wasn't significant and likely wouldn't provide a direction for Asia.
"It's a very small thing...some speculative buying and speculative selling," said a trader at a Japanese commodity brokerage.
Copper has surprised many analysts by rallying 8% this week despite little fresh fundamental news. Reports of an expected slowdown in Chinese copper imports and doubts about the size of futures shorts, and hence the impact of short-covering, has failed to slow its rise, making short-term predictions difficult.
"I don't know whether such a bearish factor (as slowing Chinese imports) is bearish enough to weaken the price," said a copper trader at a Japanese commodity house in Tokyo, who has been expecting a pullback since copper broke above $6,950.
He added that further gains could prompt short-covering by Japanese consumers, who are waiting on the sidelines to gauge copper's direction.
"If the market breaks $7,450, some of them will have to rush to buy."
Standard Bank, in a daily note, said the rally in copper and other base metals "seems to be overextending," and the market was ignoring the effect of such sharp rises in prices on the consumer community.
Aluminum was a tad lower in Asia, easing $10 to $2,860/ton. Its steady gains in the past week have brought it close to $2,900, and a break of that resistance level may trigger options activity that could send it up to $3,000, said a trader at a Japanese commodity brokerage.
"If it breaks $2,900, we may see a new story."
Other base metals saw little action in Asia, although sentiment for nickel and lead remains bullish, especially if copper continues to post gains.
As of 0645 GMT, three-month zinc was down $20 at $3,475/ton; nickel was last quoted at $49,450/ton and was untraded in Asia; tin was quoted at $14,275/ton and was also untraded in Asia; lead was quoted at $2,010/ton and was likewise untraded.
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