LONDON, Nov 11 (Reuters) - Copper prices fell on Wednesday as worries about growth and demand resurfaced on fading optimism about vaccines to help end the COVID-19 crisis, while a higher dollar reinforced negative sentiment.
Benchmark copper on the London Metal Exchange was down 0.5% at $6,894 a tonne at 1705 GMT.
Prices of the metal used widely in power and construction rose above $7,050 on Monday, the highest since June 2018, after Pfizer said its experimental COVID-19 vaccine was more than 90% effective based on initial data from a large study.
ED&F Man Capital Markets analyst Edward Meir said caution was warranted.
“We could see rallies start to stall and perhaps even reverse slightly, especially considering that the timeline on widespread vaccine inoculations is still somewhat up in the air,” he said.
DOLLAR: A higher U.S. currency makes dollar-priced commodities more expensive for holders of other currencies, which would subdue demand and prices.
DATA: China’s record imports this year have helped copper’s ascent in recent months.
“There is a lot of copper going to China, but it isn’t being consumed, take a look at the premiums,” a copper trader said.
Copper prices on the spot market in China are based on the LME benchmark plus a premium SMM-CUYP-CN which is currently below $50 a tonne, about half the levels seen in May and the lowest since May last year.
ALUMINIUM: Worries about supplies on the LME market have eased due to large holdings of aluminium <0#LME-WHL > being reduced and the unwinding of a 30%-39% long futures position for November settlement.
This is why the discount for the cash aluminium CMAL0-3 over the three-month contract has reappeared. It is around $20 a tonne compared with a small premium at the start of November.
Three-month aluminium was up 0.4% at $1,915 a tonne.
OTHER METALS: Zinc ceded 0.9% to $2,621, lead climbed 0.9% to $1,867, tin fell 0.4% to $18,210 and nickel gained 0.4% to $15,965 a tonne. (Reporting by Pratima Desai; Editing by Mark Potter)