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Copper Slips; Set for Best Monthly Gain Since 2016

HANOI, Feb 26 (Reuters) - Copper prices fell on Friday, as a week-long rally in base metals ran out of steam, but the metal was on track for its best month since 2016 on low inventories and a bright demand outlook.

Three-month copper contract on the London Metal Exchange was down 2% at $9,223.50 a tonne by 0522 GMT. It, however, gained 17.4% so far in February, set for its best month since November 2016.

On Thursday, LME copper hit its highest since August 2011 of $9,617 a tonne, only 5.6% below its record high level of $10,190 marked in February 2011.

The most-traded April copper contract on the Shanghai Futures Exchange declined 0.8% to 68,820 yuan ($10,636.13) a tonne, but it was also set for its best monthly gain since November 2016.

“Investor sentiment towards base metals - particularly towards green transition metals such as copper, nickel and lithium - remains very positive for now, which is likely to push prices even higher in the near term,” Fitch Solutions said in a note.

“However, we believe that base metal prices will soon peak and ease later in the year. The current rally in prices is being driven by overly bullish sentiment towards the COVID-19 demand recovery and decarbonisation trends, and we believe a more nuanced fundamental picture will emerge in the coming quarters.”

LME aluminium fell 2% to $2,191.50 a tonne, zinc declined 1.7% to $2,840 a tonne and tin dropped 3.3% to $25,950 a tonne.

ShFE nickel shed 2.3% to 141,700 yuan a tonne and ShFE tin tumbled 4.1% to 185,170 yuan a tonne.


* Peru’s Southern Copper Corp plans to push forward new and pending projects as demand from China and constrained supply generally help propel a global price rally, an executive said.

* ShFE aluminium bucked the trend, rising 0.8% to 17,360 yuan a tonne after hitting its highest since August 2011 of 17,695 yuan earlier in the session.

$1 = 6.4704 yuan

Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips and Rashmi Aich

Source: Reuters

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