Copper halts week-long rally as dollar steadies

LONDON — Copper prices fell on Tuesday, as the dollar steadied around 11-month highs and traders took profits made after a week-long rally fueled by Donald J. Trump’s US election victory.

Three-month LME copper fell 3.2% to a one-week low of $5,360 a ton and closed 0.9% lower at $5,520. The decline is a reversal of the nearly 8% leap in intraday trading on Friday to its highest since June 2015.

“A drop below $5,000 is likely because nothing has fundamentally changed… the picture for copper had already improved before the US election on positive US and Chinese economic data,” Commerzbank Analyst Daniel Briesemann said. “But the wave of speculative trade that took over the market last week on expectations for a US infrastructure push is now settling and copper will probably still be in a supply surplus next year.”

Copper recorded its biggest weekly gains last week since 2011 at 11.2%, a rally that was also buoyed by Mr. Trump’s promises of infrastructure spending, which could lead to higher consumption of industrial raw materials.

The most-traded copper contract on the Shanghai Futures Exchange settled 4.3% down at 43,670 yuan ($6,371) a ton.

Total net long position of funds trading copper on the London Metal Exchange (LME) rose 18% to 63,870 lots last Friday from the previous week, the LME’s Commitments of Traders Report showed on Tuesday.

Hedge funds and money managers raised their net long positions in COMEX copper to the highest on record at 59,263 lots in the week to Nov. 8, US Commodity Futures Trading Commission data showed on Monday.

The metals complex was also pressured by general strength in the dollar, which earlier traded near its strongest since 2003 against a basket of currencies, before steadying.

Three-month LME zinc closed up $7 at $2,614 a ton, retreating from a fresh high since January 2010 at $ 2,684 reached earlier. The metal is up around 60% this year. The most-traded zinc contract on the Shanghai Futures Exchange rose as much as 6.3% on expectations of a pickup in Chinese demand for steel alloys. It ended 1.2% higher at 21,115 yuan ($3,080).

Lead closed 0.6% higher at $ 2,209 a ton, after reaching a fresh high since September 2014 at $2,238. Tin closed 2.5% lower at $20,300, after touching a near one-month low of $19,840 a ton earlier. Nickel closed 0.3% higher to $11,290 a ton, while aluminum closed unchanged at $1,735 a ton. —