Copper prices trimmed earlier gains heading into the Asian market close on Monday, as investors locked in profits after a sharp rally that pushed prices to record highs.

The benchmark three month copper on the London Metal Exchange surged 3.27% to $12,560 per metric ton as of 0740 GMT, after setting a record of $12,960 a ton earlier in the session.

The most-active copper contract on the Shanghai Futures Exchange, meanwhile, was retreated from the 100,000 yuan level, closing daytime trading up only 0.76% to 98,860 yuan($14,105.33) a ton, after briefly touching an all-time high of 102,660 yuan.

Investors locked in profits as copper prices raced to record highs, while some shifted to a risk-off stance, traders said.

The nearing year-end, along with elevated prices, was also expected to cool spot demand, adding pressure to the rally.

Gains earlier in the day came as the London benchmark copper contract closed the gap with gains made in the Shanghai contract during the London exchange’s Christmas holiday closure.

Shanghai copper gained 5.81% last week, while the London copper posted a weekly gain of 1.93%.

A group of China’s top smelters on Thursday decided not to set guidance for copper concentrate processing fees for the first quarter of next year amid low charges due to a supply shortage, while China on Friday said it would rein in its copper capacity growth in the next five-year plan, supporting gains in Shanghai copper.

The Monday rally also drew support from traders’ bets on two-more interest rate cuts by the U.S. Federal Reserve as they await the Tuesday release of minutes from the Fed’s December meeting for clues on how policy makers aim to balance the risks of inflation and a weakening labour market.

In the London market, aluminium rose 0.49%, zinc gained 0.68%, lead added 0.70%, nickel dropped 0.13% and tin climbed 1.60%.

Among other SHFE base metals, aluminium rose 0.83%, zinc moved 0.54% higher, lead rose 0.78%, nickel lost 0.86% and tin declined 0.99%.
Source: Reuters