(Adds zinc/lead balances, updates with closing prices)
By Eric Onstad
LONDON, Jan 17 (Reuters) - Copper resumed its decline on Wednesday as some speculators took profits from a December rally and others went short after prices broke below technical levels.
Copper surged 12 percent during its December rally and has since eased back by about 3 percent.
“That was a pretty rapid rise in December and we seemed to have traded ahead of the fundamentals, so there was always the risk of profit-taking, given the net speculative positioning was elevated,” said Robin Bhar, head of metals research at Societe Generale in London.
Bhar added that once prices broke technical support levels that triggered more selling, though he said he viewed any further falls as a buying opportunity.
There is uncertainty about supply in the market because of Chinese import restrictions on copper scrap and labour contract talks at several mines, including the huge Escondida mine, Bhar said.
Benchmark copper on the London Metal Exchange closed 0.6 percent down at $7,034 a tonne, having fallen by 1.8 percent on Tuesday.
* POSITIONS: Futures brokerage Gelin Dahua has cut its long position on the Shanghai Futures Exchange (ShFE) April copper contract by 75 percent over the past two days, according to Reuters calculations based on ShFE data.
* LME ALUMINIUM: Three-month LME aluminium rose 0.1 percent to end at $2,192 a tonne.
* SHANGHAI ALUMINIUM: The most-traded March contract on the ShFE closed 1.8 percent down for its lowest finish since Dec. 19 as improving weather conditions smoothed the flow of ingots from China’s remote northwestern Xinjiang region to the east of the country.
* FERROUS: Steel-linked zinc and nickel were pressured after Chinese iron ore futures fell for a fifth day running to 2-1/2 week lows. Prices have been pressured by low demand in the world’s biggest consuming nation amid ongoing curbs on steel production in a campaign against smog.
* NICKEL/ZINC: LME nickel, mainly used in stainless steel, dropped 1.1 percent to finish at $12,415 a tonne, while galvanising metal zinc also declined 1.1 percent to $3,367.50
* ZINC POSITIONING: Zinc had the largest speculative net long position on the LME with 18.5 percent of open interest as of Friday, based on Marex Spectron estimates, the broker said in a note.
* ZINC/LEAD BALANCES: The global zinc market deficit widened to 80,100 tonnes in November while the global lead market showed a surplus of 15,600 tonnes, data showed on Wednesday.
*PRICES: Lead fell 0.3 percent to close at $2,547 while tin added 0.1 percent to $20,495.
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($1 = 6.4320 Chinese yuan renminbi)
Additional reporting by Tom Daly in Beijing; Editing by Jason Neely and David Goodman