Copper futures have closed lower on the London Metal Exchange (LME), weighed down by profit-taking after the previous session’s rally and persistent concerns over credit conditions in China.
At the PM kerb close on Wednesday, LME three-month copper was down 1.4 per cent at $US6,510 a metric ton.
Aluminium was 1.3 per cent lower at $US1,729 a ton.
Copper futures cooled as investors cashed in on the previous day’s two per cent rally, said analysts and brokers.
The metal rose on Wednesday as worries about supply disruptions in Chile and speculation over possible economic stimulus by China reinvigorated investor interest in the metal.
Anglo American shut down its Los Bronces mine in Chile on Monday after violent contract-worker protests disrupted operations. Work at the mine was restarted on Tuesday, however, with production returning to normal levels by the end of the day.
Concern over Chinese demand for copper also weighed on prices, as the yuan fell against the US dollar, raising the cost of the dollar-denominated metal to Chinese consumers.
The yuan has fallen sharply in recent weeks after China’s central bank allowed the currency to trade more freely in a bid to shake out speculators.
“In view of the gloomy sentiment among market players at present, (copper) prices could well continue to fall for the time being, especially since the copper price is in technical difficulties,” said analysts Commerzbank.
“The fact that it slipped under last June’s low (of $6,602 a ton) has already sparked follow-up selling, meaning that the price could decline to the low of somewhat above $6,000 per ton that it hit in 2010.”