Copper futures in Shanghai dropped for the first time in three days as some investors sold the industrial metal after a liquidity squeeze and on concern the Chinese market is oversupplied.
Metal for delivery in March on the Shanghai Futures Exchange retreated 0.3 percent to close at 52,210 yuan ($8,599) a metric ton. The most-active contract earlier climbed 0.8 percent to 52,770 yuan, the highest intra-day level since Sept. 30. Today’s drop extended losses this year to 9.8 percent.
“Oversupply concerns in the Chinese copper industry and the recent credit tightness increased risk sentiment and triggered profit taking,” said Li Ye, an analyst at Shenyin & Wanguo Futures Co. in Shanghai.
Copper production in China, the world’s largest user, climbed to a record in November, the National Bureau of Statistics said on Dec. 12. The seven-day repurchase rate, a gauge of funding availability in the banking system, slid today after touching the highest level since June on Dec. 23.
The contract for delivery in March rose 0.3 percent to $3.3805 a pound on the Comex in New York. The London Metal Exchange was closed for a second day for Christmas holidays.