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Copper prices fall from 16-month peak as profit-taking takes place

Prices of copper fell on Monday, after reaching 16-month-highs earlier in session. Profit-taking due to a stronger dollar overshadowed concerns about supplies from Chile and Indonesia.

Benchmark copper was trading 0.7% lower at $10.636 per metric ton, after reaching its highest level since May 22, at $10.800. Monday's peak was a nearly 25% increase since early April.

The traders said that the absence of Chinese markets during Golden Week holidays was a major factor in the rapid rise of copper since last week. Chinese players sold LME Copper many times during this latest rally.

Some traders and funds have squared long positions, betting on higher metal prices due to the strengthening of the U.S. dollar, which makes metals priced in dollars more expensive for buyers using other currencies.

The supply issue is expected to remain a concern, however, due to the suspension of operations at Freeport McMoRan’s Grasberg mine in Indonesia following a mudslide, and other disruptions in this year including Kamoa Kakula in Democratic Republic of Congo, and Chile’s El Teniente Mine.

Goldman Sachs analysts stated in a report that they were bullish on the copper price compared to historical averages.

The copper market has a modest surplus at the moment, and we expect it to remain so in 2026 despite a drop in global refined production due to recent mine disruptions. We don't see a deficit until the end decade.

The focus was also on lead in LME registered warehouses. Specifically, cancelled warrants or material earmarked for deliver, 0#MPBSTXLOC>, which at 22% means that more than 30,000 tonnes of battery metal could be leaving the LME system.

The cancellation of the contract last week has reduced the discount on the cash contract for three months forward . Lead for the three-month period was down by 0.5%, at $2.009 per ton.

Other metals saw aluminium gain 0.2%, to $2,715 per ton. Zinc lost 0.5%, to $3,018, while tin fell 2.2%, to $36,625; and nickel fell 0.5%, to $15,350.

(source: Reuters)