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Prices of copper and other base metals fell on Wednesday as investors remained cautious following weeks of volatility in financial markets due to turmoil in the banking sector, even as fears of a full-blown crisis have eased.
Three-month copper on the London Metal Exchange CMCU3 was down 0.7% at $8,917 a tonne by 0709 GMT, after two straight sessions of gains.
The most-traded May copper contract on the Shanghai Futures Exchange SCFcv1 ended daytime trade 0.2% lower at 69,280 yuan ($10,055.15) a tonne.
“Commodity traders, funds and companies have rushed to cut positions on copper and other metals,” broker SP Angel said in a note. “We read this as short-term deleveraging and risk-off trading.”
Prices pulled back despite the U.S. dollar’s weakness that makes greenback-priced metals cheaper for buyers with other currencies. The dollar =USD was still on the back foot on Wednesday following two consecutive days of losses.
“Clearly, investors have not completely lost their anxiety in the wake of the recent bank failures in the U.S. and hints of a big regulatory overhaul are likely to weigh on the sector until details emerge,” ING analysts said in a note.
LME nickel was down 0.5% at $23,960 a tonne, retreating after hitting a three-week high in the previous session and advancing for four consecutive sessions on dwindling inventories and short-covering by speculators.
LME aluminium fell 0.5% to $2,377 a tonne, zinc CMZN3 shed 0.5% to $2,922.50, tin CMSN3 was down 0.8% at $25,570 and lead CMPB3 edged down 0.2% to $2,130.