Copper futures retreat from Nov. 2014 peak

LONDON — Copper futures retreated from their highest levels in 33 months on Friday as investors locked in profits from a rally and adjusted positions before a long weekend.

“I think we’re seeing some profit taking and book-squaring ahead of the holiday weekend,” a trader said.

Monday is a market holiday in Britain and the London Metal Exchange ( LME) will be closed.

Metals fell into the red across the board after analysts said industrial metals prices needed to take a breather after the LME index of six metals gained 18% since early June.

“I share the view that copper is over-extended and that a correction is due, but every correction needs a trigger,” said Julius Baer commodities research analyst Carsten Menke in Zurich.

One trigger could be a rebound in the dollar and the other would be a confirmation that economic growth in top metals consumer China was due to slow down in coming months, he added.

Three- month LME copper closed down 0.30% at $6,666 a ton, erasing gains after having touched $6,747, its highest since November 2014.

Copper was earlier boosted when weekly copper stocks in warehouses registered by the Shanghai Futures Exchange declined by 8.20% to 187,444 tons, data showed on Friday.

On- warrant inventories — those not earmarked for removal — in London Metal Exchange depots have halved to 112,950 tons over the past six weeks.

LME benchmark aluminum slid 1.70% to finish at $2,070 a ton after LME inventories continued to rise. On-warrant stocks have gained 101,725 tons, or 10%, in about two weeks.

The LME “tom-next” spread for aluminum, which is the cost of borrowing metal for a day and often a flashpoint for positioning tension, flared to a $10 backwardation.

The recent rally in implied options volatility has made buying options expensive but provided an opportunity for relative- value plays, such as buying LME aluminum calls and selling SGX iron ore calls, Citi analyst Daoyuan Zhou said in a note.

LME nickel ended down 2.20% at $11,485 despite news that lawmakers in the Philippines, the world’s top nickel ore supplier, filed a bill to ban mining in watershed areas and halt exports of unprocessed ores.

LME zinc dropped 1.80% to close at $3,063.50, lead fell 1.40% to $2,325 and tin shed 0.80% to $20,325. —