Prices can hit record highs at any time, but investors want to see room to take profits.
When spot prices hit 49,000 that affected consumption at first. But that was a month ago ... now people expect prices to pick up. Traditionally in March and April consumption is higher than in January and February.
Before the Easter vacation there was short-covering in London as next Wednesday is also the settlement day there, so after the vacation there should be more stop-loss buying.
Funds are buying and China's demand is still healthy. The sharp rise was to catch up with gains in London in the past week.
The sell-off in oil damped demand for some metals yesterday in London and New York. Traders in China are worried there might be a chain reaction of funds selling metals to take profits.
In China, purchases from major consumers, including power cable makers, are still normal at this price level. Buyers are doing futures to hedge price swings and help reduce losses made on the spot market.
The extent of the rate hike this time is fairly small. What is more important is whether or not more lies ahead. And even if there are further rate hikes, it is investment that will first be impacted, followed by consumption.