London copper eased slightly in early Asian trading on Thursday, but largely held sharp overnight gains that drove the contract to a four-year high on signs of strong demand from China next year.
Commodities traders said some profit-taking emerged at the higher end of copper's price rise, but was held in check somewhat by a weaker US dollar. Non-US holders of US dollar-denominated commodities, such as London Metal Exchange contracts, typically sell into a stronger dollar.
Three-month copper on the London Metal Exchange slipped 0.19 per cent to $7,225 a tonne by 0100 GMT. Contract in the more active London session overnight touched $7,259, its highest since January 2014, when it hit $7,460 a tonne, according to Thomson Reuters data.
Prices of the metal used widely in power and construction are up 30 per cent in the year to date. The most-traded copper contract on the Shanghai Futures Exchange gained 0.36 per cent to 55,310 yuan ($8,436.55) a tonne.
China's leading copper smelter Tongling Nonferrous Metals Group has agreed with Freeport-McMoRan Inc for treatment and refining charges (TC/RCs) at $82.25 per tonne and 8.225 cents per pound as the 2018 benchmark, a company source with the smelter told Reuters on Wednesday.
Capacity and inventories
Bullish sentiment in the aluminium market was reinforced by news that China's government has criticised officials in the industrialised province of Shandong for deceiving authorities to evade capacity cuts in the polluting coal, steel, aluminium and chemicals sectors. However, aluminium stocks in warehouses AL-STX-SGH monitored by the Shanghai Futures Exchange, at a record 741,324 tonnes, suggest surpluses in China, the world's largest producer and consumer of the metal.
The US dollar fell to a 3-1/2 week low against a basket of currencies on Wednesday as traders bet more major central banks will begin reducing monetary stimulus in 2018 because of faster global economic growth.
The remainder of active ShFE base metals contracts were firmer, led by aluminium and lead , each up more than 1 per cent. The exception was tin, which was off 0.11 per cent.