Copper eases as high prices pinch demand, on track for weekly gain

Copper eased on Friday, even as it was set to log a second straight weekly gain, as investors weighed persistent supply risks against signs that high prices are starting to curb demand in top consumer China. On Friday, the benchmark three-month copper on the London Metal Exchange was down 2.33% at $13,613.50 a metric ton as of 0710 GMT, while the most-active copper contract on the Shanghai Futures Exchange tumbled 2.70% to close daytime trading at 104,710 yuan ($15,388.35) a ton. The London contract was up more than 0.40% so far this week, while SHFE copper ended the week rising 0.15%. Both contracts hit their highest levels in more than three months this week, as funds bought into concerns over supply and processing constraints. But the rally began to lose momentum on Thursday, as traders locked in profits. Also, elevated copper prices curbed new orders, analysts at Chinese broker Jinrui Futures said. SHFE copper stocks are showing signs of accumulating. On-warrant copper stocks have started to rise since Tuesday, ending their prolonged decline since mid-March, totalling 97,011 tons on Thursday, up from 88,077 tons on Monday. Spot market indicators were also softer. The premium paid by Chinese copper buyers over SHFE prices has flipped into a discount, a sign that buyers are reluctant to chase prices higher. Meanwhile, rising oil prices, a stronger U.S. dollar and expectations that the Federal Reserve may keep interest rates unchanged for longer remained key sources of pressure for copper and the broader industrial metals market. Among other metals on the LME, aluminium lost 1.38%, zinc eased 1.79%, lead was down 0.99%, nickel slid 1.24% and tin plunged 3.94%. On SHFE, aluminium lost 2.07%, zinc declined 0.70%, lead dropped 0.69%, nickel tumbled 1.96% and tin plunged 5.68%.