(Updates prices)
HANOI, Feb 26 (Reuters) – Copper fell on Friday as a week-long rally in base metals ran out of steam, but the metal was on track for its best month since November 2016 on low inventories and bright demand outlook.
Three-month copper on the London Metal Exchange shed 2% to $9,226 a tonne by 0705 GMT, but was up 17.5% so far in February.
On Thursday, LME copper hit its highest since August 2011 of $9,617 a tonne, 5.6% below its record high of $10,190 marked in February 2011.
The most-traded April copper contract on the Shanghai Futures Exchange closed down 2.1% at 67,950 yuan ($10,507.68) a tonne, but marked its best month since November 2016.
“Investor sentiment towards base metals – particularly towards green transition metals such as copper, nickel and lithium – remains very positive for now, which is likely to push prices even higher in the near term,” Fitch Solutions said in a note.
“However, we believe that base metal prices will soon peak and ease later in the year. The current rally in prices is being driven by overly bullish sentiment towards the COVID-19 demand recovery and decarbonisation trends, and we believe a more nuanced fundamental picture will emerge in the coming quarters.”
Shanghai aluminium bucked the trend, rising 1.4% to close at its highest since September 2011 at 17,465 yuan a tonne, on solid demand and fears of supply disruptions from China’s Inner Mongolia region, traders said.
FUNDAMENTALS
* Peru’s Southern Copper Corp plans to push forward new and pending projects as demand from China and constrained supply generally help propel a global price rally, an executive said.
* LME aluminium fell 1% to $2,213 a tonne, zinc declined 1.4% to $2,849 a tonne and tin dropped 3.1% to $256,005 a tonne.
* ShFE nickel shed 3.2% to 140,490 yuan a tonne and ShFE tin tumbled 4.5% to 184,400 yuan a tonne.
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