RTRS:Copper falls on firm dollar but near 4-1/2 month high
(Reuters) - Copper eased on Monday but remained near 4-1/2 month highs, pressured by a strengthening U.S. dollar, while profit-taking by Chinese investors ahead of a week-long national holiday sent Shanghai prices lower by over one percent.
Three-month copper on the London Metal Exchange was down 0.7 percent to $8,220 per metric ton (1.1023 tons) by 12.46 a.m. EDT, after inching up 0.1 percent in the previous session.
The most active January copper contract on the Shanghai Futures Exchange fell 1.1 percent to 59,080 yuan ($9,400) per metric ton, after gaining 0.7 percent on Friday.
"Chinese investors are in profit-taking mode before the national holiday. No one wants to wait till the last day of trading because the margins on that day will be so high," said a Shanghai-based trader with an international firm.
The Shanghai Futures Exchange (ShFE) will be closed from September 29 to October 7. for the mid-autumn and Chinese National Day holidays and it will temporarily hike trading margins for all its futures contracts from September 28 to control price volatility.
Margins for ShFE copper, lead and zinc will be raised by 4 percentage points to 12 percent while those for aluminum will be raised by 5 percentage points to 11 percent.
"We are approaching the end of September, after which companies will have to file their third-quarter financial results so they are more inclined to clear inventories and close off futures positions," said a second Shanghai-based physical copper trader.
A strengthening U.S. dollar, due to increased risk aversion, also weighed on metals and other commodities priced in the greenback because it made them less attractive to buyers holding other currencies.
The dollar index .DXY measured against a basket of key currencies .DXY rose 0.23 percent, with the euro testing last week's low against the dollar on Monday.
In industry news, China's implied consumption of refined copper rose 9.5 percent in August from the previous month because of fewer exports and increased domestic production, according to Reuters calculations based on official data released on Friday.
