copper prices fell friday, breaking a record winning streak that has taken prices to the highest level in 17 months. copper for december delivery, the most-active contract, settled down 1.6% at $2.5090 a pound on the comex division of the new york mercantile exchange after rising for 14 sessions in a row, the longest streak in at least 28 years. prices rose as high as $2.705 a pound before reversing gains. tai wong, head of metals trading at bmo capital markets, said chinese regulators enforced new limits on copper positions in china to damp aggressive retail buying that had sent prices up earlier in the day. sucden financial noted that the chinese regulator asked brokers to disclose details of large positions by next friday, which was <u+201c>seen as a warning shot to the market<u+201d> as exchanges tried to stem the flood of speculative money. while copper has benefited from the prospect of increased infrastructure spending in china and the u.s. in november, traders said speculative interest has picked up substantially in the past few sessions. for the week, copper prices rose more than 10%. <u+201c>this is kind of the back end bubble buying<u+2026>that can be very risky,<u+201d> mr. wong said. <u+201c>this is the regulators taking notice.<u+201d> margin requirements on base metals also have been rising as prices spiked, he said. speculative buying by chinese retail investors has sparked rallies in other metals such as steel and iron ore this year. as those bets have become crowded and more regulated, interest in copper has picked up as a way to gain exposure to base metals, some investors said. copper has benefited from a donald trump election victory, as the president-elect has emphasized infrastructure spending in his campaign and victory speech. heavy investment in infrastructure projects would stoke demand for metals used in construction. <u+201c>the break higher in copper prices started well before election night, but the narrative of a policy-driven demand recovery was eagerly employed by chinese and western speculators to justify putting additional leveraged cash to work on the long side in copper futures,<u+201d> paul crone, founder of metal hedge fund citrine capital management llc, wrote in an email. signs of strengthening demand in china, the world<u+2019>s top copper consumer, and falling stockpiles in shanghai and london, have boosted optimism. the previous week saw the largest inflows into copper exchange-traded funds since july, with $14.1 million moving into long copper futures, said nitesh shah, a commodities strategist at etf securities. until the recent rally, the metal had posted only single-digit gains this year, trailing other base metals. now, copper is up about 18% so far this year, catching up to aluminum and lead, which are up about 16% and 18%, respectively. still, some analysts are skeptical of the scale of the rally since mr. trump<u+2019>s victory. <u+201c>obviously the really crazy [gains] we saw in the last few days nobody expected, and i think it seems a bit excessive,<u+201d> said manne rasmussen, a portfolio manager at the harcourt commodity fund in zurich, who called the pace <u+201c>too much, too soon.<u+201d> others said the viability of mr. trump<u+2019>s infrastructure plans remained unclear. <u+201c>i think the market<u+2019>s probably reacting too soon<u+201d> to mr. trump<u+2019>s policies, said etf securities<u+2019> mr. shah, who expects copper to pull back. <u+201c>it<u+2019>s not necessarily a slam dunk.<u+201d> the london metal exchange three-month copper contract closed down 0.1% at $5,549.00 a metric ton. other base metals also closed lower. aluminum prices fell 1.4% to $1,745.00 a ton, zinc fell 2.1% to $2,472.00 a ton, tin fell 0.5% to $21,400.00 a ton, nickel fell 2.9% to $11,210.00 a ton and lead fell 2% to $2,110.00 a ton. write to stephanie yang at stephanie.yang@wsj.com and katherine dunn at katherine.dunn@wsj.com
copper drops as regulators damp record rally  - wsj
stephanie yang katherine dunn