(Updates with official prices)<\/p>\n
LONDON, Feb 26 (Reuters) – Copper recoiled on Friday after touching successive multi-year peaks, falling more than 3% as risk-off sentiment hit wider financial markets after a spike in bond yields.<\/p>\n
Three-month copper on the London Metal Exchange (LME) slumped 3.1% to $9,120.50 a tonne in official trading, having hit multi-year peaks in six consecutive sessions.<\/p>\n
On Thursday, LME copper hit its highest since August 2011 at $9,617 a tonne, 5.6% short if its record high of $10,190 in February 2011.<\/p>\n
Other metals, such as aluminium and nickel, were also hit as Asian shares suffered their heaviest fall in nine months amid a rout in global bond markets that sent yields flying.<\/p>\n
\u201cThe short-term outlook is probably one of caution, with risk-off deleveraging hovering over the market,\u201d said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.<\/p>\n
\u201cWhat we are seeing is probably an overdue and healthy stage of consolidation at best or a correction at worst.\u201d<\/p>\n
A lot would depend on the reaction of big Chinese players that have taken large positions, such as Shanghai Dalu Futures, which has amassed a $1 billion long position in copper contracts, Hansen added.<\/p>\n
\u201cThe question is what kind of pain threshold those big whales in the Chinese market have,\u201d he said. \u201cWe could run into a cascading wave of long liquidation, but I think the fundamental reason for owning commodities will probably prevent a major correction.\u201d<\/p>\n
The most-traded April copper contract on the Shanghai Futures Exchange closed 2.1% down at 67,950 yuan ($10,507.68) a tonne but marked its best month since November 2016.<\/p>\n
* Peru\u2019s Southern Copper Corp plans to push forward new and pending projects as demand from China and constrained supply generally help to propel a global price rally, an executive said.<\/p>\n
* LME aluminium fell 1.5% to $2,202.50 a tonne, zinc declined 1.9% to $2,836.50, nickel dropped 2.9% to $18,660, lead was down 1.8% at $2,120 and tin retreated 3.6% to $25,875.<\/p>\n
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