METALS-Copper hovers near record highs on supply constraint concerns, rate cut bets

By Ishaan Arora

Dec 23 (Reuters) - Copper prices were broadly steady on Tuesday, hovering near record highs hit in the previous session, as supply constraints and bets of easing monetary policy in the U.S. and China buoyed prices.

The most active copper contract on Shanghai Futures Exchange SCFcv1 closed daytime trade little changed at 93,740 yuan ($13,337.0) per metric ton as of 0727 GMT. It touched a record high of 94,470 yuan on Monday.

The benchmark three-month copper on the London Futures Exchange CMCU3 gained 0.2% to $11,944.0 a ton.

In China, supply-side factors also provided support. The country's top copper smelters will cut production by over 10% in 2026 to counter over-capacity in the industry that has increasingly distorted copper concentrate processing fees, according to a Chinese market information provider.

"The base metal complex fundamentals look very promising (as) China is likely to introduce a new round of interest rate cuts and is also looking to cut excess melting capacity for all base materials, which is very, very bullish," said Kunal Shah, head of research at Nirmal Bang Commodities.

Among other SHFE base metals, nickel SNIcv1 extended gains to a fifth straight session, rising 4.4% to 123,040 yuan a ton, a more than two-month high.

The London benchmark nickel CMNI3 also gained, up 1.2% to $15,460 a ton, its highest since October 10.

"LME copper looks to test $13,500/ton and aluminium is likely to (reach) $3200/t in the next six to nine months while zinc could test $3,200 after the next quarter," Shah said.

In Shanghai, aluminium SAFcv1 fell 0.3%, zinc SZNcv1 was up 0.1%, lead SPBcv1 was up 0.3%, and tin SSNcv1 gained 0.5%.

Among other LME metals, aluminium CMAL3 nudged 0.1% higher, zinc CMZN3 was steady, lead CMPB3 added 0.3%, while tin CMSN3 gained 1.2%.

($1 = 7.0286 Chinese yuan renminbi)