By Ed Ballard and Ira Iosebashvili
Copper prices fell Tuesday as analysts cautioned that the market was due for a correction after a dramatic rally stoked by Donald Trump's election.
Copper for December delivery was recently down 1% at $2.4965 a pound on the Comex division of the New York Mercantile Exchange.
Prices for the metal are up more than 19% from their October lows, driven by expectations of increased U.S. infrastructure spending under a new presidential administration and a steadier economic outlook for China.
China and the U.S. are the world's largest copper consumers, respectively.
"Prices ran ahead of themselves," said William Adams, Head ofResearch at Fast Markets Ltd. "We'll probably consolidate this week after the froth of last week."
Looking ahead, he said news of appointments to President-elect Donald Trump's team could move the market as investors seek a clearer understanding of the likely direction of U.S. government policy.
Meanwhile, Chinese foreign direct investment data due later Tuesday may shift views of the strength of demand from the world's key consumer of industrial metals.
Carsten Menke, commodities research analyst at Julius Baer, said Mr. Trump's victory probably won't have a big influence on the global balance of supply and demand for base metals, even if he delivers on his promise to boost infrastructure investment.
"Even an assumed 10% increase in [U.S.] infrastructure-related copper consumption would hardly matter on a global scale," he wrote.
Analysts at Commerzbank highlighted "further correction potential" for copper after data from the U.S. Commodity Futures Trading Commission showed speculators' net long position in copper futures on the Comex division of the New York Mercantile Exchange rose over 150% to a record 59,300 contracts in the week to Nov. 8.
The data covers the period before the election of Mr. Trump, so next week's figure may show an even more bullish stance among speculators, Commerzbank said.
Write to Ed Ballard at firstname.lastname@example.org and Ira Iosebashvili at email@example.com
(END) Dow Jones Newswires
November 15, 2016 12:07 ET (17:07 GMT)
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