LONDON, Nov 30 (Reuters) - Copper prices spiked to the
highest in more than seven years on Monday as many wary
investors bet that a sizzling rally needed a pause in coming
days as the year-end approached.
Three-month copper on the London Metal Exchange had
gained 0.9% to $7,566 a tonne by 1700 GMT after touching
$7,708.50, the strongest since March 2013.
Copper is up about 13% so far in November and on track for
its biggest monthly gain since November 2016.
"Copper does look dangerously overbought. It's the weight of
money, the enthusiasm for the green revolution," said
independent consultant Robin Bhar.
"A correction could come any time soon because a lot of CTAs
(commodity trading advisor funds) and hedge funds have November
year-ends. Given that a lot these funds have been long, they can
crystallise profits by selling, so we might see that in the next
Any correction would likely be brief, with many investors
buying on the dips, Bhar added.
Buoyant China manufacturing data and risk-on sentiment
fuelled by vaccine developments also lifted Chinese markets,
pushing copper there to an eight-year high.
China's factory activity expanded at the fastest pace in
more than three years in November.
Copper is used widely in the manufacturing sector and China
consumes about half of the metal globally.
Most of the LME metals surged to fresh highs on Monday,
although many slipped into the red in afternoon trading.
"I would buy every metal, especially those relatively
undervalued like lead," said a China-based analyst, adding that
the market would further rally until funds trading on
macroeconomic news started taking profit and reducing positions.
GREEN REVOLUTION: Greater use of electric vehicles and
expansion of renewable energy capacity to cut noxious emissions
will mean accelerating demand growth for copper in coming years
which will sustain prices.
CHARGES: Copper miners and smelters are still miles apart in
their negotiations on concentrate treatment charges for next
PRICES: LME aluminium climbed 2.3% to $2,044 a
tonne, zinc fell 0.6% to $2,777, lead dropped
1.6% to $2,065, nickel shed 2.6% to $16,020 and tin
slipped 1.6% to $18,615.
PEAKS: Aluminium surged to its highest in over two years,
nickel and lead hit one-year highs while zinc touched the
strongest in 18 months.
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($1 = 6.5865 yuan)
(Additional reporting by Mai Nguyen; Editing by Kirsten Donovan
and Jan Harvey)