Copper edged further off 4-month peaks on Monday as investors took profit and stocks rose for a second day running, though lingering supply concerns put a strong floor under prices.
London Metal Exchange data showed stocks rose by 2,850 tonnes - a second straight day of gains - though overall, stocks remain near their lowest levels in six years, supporting prices.
Also, the market was ripe for a bout of profit-taking, traders said. Comex copper speculators raised their net long position by 10,441 contracts to 24,767 in the week to July 1, the most recent data from the Commodity Futures Trading Commision showed.
"We think the rally is overdone. We've got tightness in the market but it's going to be temporary. Mining supply will steadily increase (in the second half) and China is not exactly booming," said Jesper Dannesboe, senior commodity strategist for Societe Generale.
Three-month copper on the London Metal Exchangewas last bid at $7,115 a tonne in official midday rings, down 0.49 percent. Copper closed down on Friday but still posted its biggest weekly rise in more than nine months, after touching a four-month peak earlier in the session.
Investors are waiting to see if record share prices will be justified by quarterly earnings reports and forecasts in the United States and elsewhere, with aluminium producer Alcoakicking off the U.S. earnings season on Tuesday.
Also, a six-month halt on exports from major producer Indonesia has exacerbated tight conditions.
"Most of the copper that was meant to be exported has been produced. It's going to come to market eventually. We just don't know when. If it comes to light that nothing is going to come out of Indonesia, that will be a game-changer for copper this year," said analyst Joel Crane of Morgan Stanley in Melbourne.
Freeport-McMoRan Copper & Gold Incis still in talks with Indonesia over the six-month dispute that has halted copper exports, and has no plan yet to follow Newmont Mining Corp in seeking international arbitration, it said last week.
On the demand side, global economic activity should strengthen in the second half of the year and accelerate in 2015, although momentum could be weaker than expected, International Monetary Fund chief Christine Lagarde said on Sunday, hinting at a slight cut in the IMF's growth forecasts.
China's economic growth quickened in the second quarter from the previous three months, but further modest government support measures will still be needed, Premier Li Keqiang said on Monday.
German industrial output fell 1.8 percent on the month in May, its biggest drop in more than 2 years, the Economy Ministry said, blaming mostly the way public holidays fell but also pointing to weakness in construction and geopolitical effects.
Nickeltraded down 0.64 percent in rings at $19,275 a tonne.
Six potential bidders, including Dutch commodity trader Trafiguraand Hong Kong-listed MMG Ltd <1208.HK>, are looking at the books of BHP Billiton's Australian nickel unit, the Australian Financial Review reported on Sunday, without saying where it got the information.
Aluminiumtraded up 0.16 percent at $1,926 a tonne, not far off a recent 10-month high.
Rising demand and the closure of some 2 million tonnes of aluminium capacity are likely to shrink an expected surplus of aluminium in China this year.
In other metals, leadtraded up 0.50 percent at $2,192 a tonne; zinc traded up 0.45 percent at $2,247 a tonne; while tin traded down 0.29 percent at $22,710 a tonne.
London Metal Exchange data showed stocks rose by 2,850 tonnes - a second straight day of gains - though overall, stocks remain near their lowest levels in six years, supporting prices.
Also, the market was ripe for a bout of profit-taking, traders said. Comex copper speculators raised their net long position by 10,441 contracts to 24,767 in the week to July 1, the most recent data from the Commodity Futures Trading Commision showed.
"We think the rally is overdone. We've got tightness in the market but it's going to be temporary. Mining supply will steadily increase (in the second half) and China is not exactly booming," said Jesper Dannesboe, senior commodity strategist for Societe Generale.
Three-month copper on the London Metal Exchange
Investors are waiting to see if record share prices will be justified by quarterly earnings reports and forecasts in the United States and elsewhere, with aluminium producer Alcoa
Also, a six-month halt on exports from major producer Indonesia has exacerbated tight conditions.
"Most of the copper that was meant to be exported has been produced. It's going to come to market eventually. We just don't know when. If it comes to light that nothing is going to come out of Indonesia, that will be a game-changer for copper this year," said analyst Joel Crane of Morgan Stanley in Melbourne.
Freeport-McMoRan Copper & Gold Inc
On the demand side, global economic activity should strengthen in the second half of the year and accelerate in 2015, although momentum could be weaker than expected, International Monetary Fund chief Christine Lagarde said on Sunday, hinting at a slight cut in the IMF's growth forecasts.
China's economic growth quickened in the second quarter from the previous three months, but further modest government support measures will still be needed, Premier Li Keqiang said on Monday.
German industrial output fell 1.8 percent on the month in May, its biggest drop in more than 2 years, the Economy Ministry said, blaming mostly the way public holidays fell but also pointing to weakness in construction and geopolitical effects.
Nickel
Six potential bidders, including Dutch commodity trader Trafigura
Aluminium
Rising demand and the closure of some 2 million tonnes of aluminium capacity are likely to shrink an expected surplus of aluminium in China this year.
In other metals, lead
