Copper prices fell on Tuesday as escalating tensions in the Middle East increased worries about global growth and demand for industrial metals while the firmer dollar reinforced negative sentiment.
Three-month copper on the London Metal Exchange was down 0.1% to $9,697 per metric ton, as of 1017 GMT.
Global stocks slid while oil rose as fighting between Israel and Iran entered its fifth day, sowing fears of a broader regional conflict. Higher oil prices dampen economic growth and stoke inflationary pressures.
“Another war has broken out, unsettling investors, raising concerns about long-term global growth, and prompting a shift away from cyclical assets like base metals and move towards safe-haven assets,” said Panmure Liberum analyst Tom Price.
The U.S. dollar index ticked up, making dollar-priced commodities more expensive for buyers holding other currencies.
Meanwhile, Citi in a note said it expects copper prices to dip to $8,800 in the third quarter if the U.S. imposes tariffs on copper imports. Until then, U.S. copper imports may worsen supply tightness outside the United States, it said.
U.S. President Donald Trump in February ordered a probe into possible tariffs on copper imports to rebuild U.S. production.
The probe has resulted in a price premium for COMEX copper futures against LME contracts, which traders and producers have capitalised on by diverting copper supplies from other markets to the United States.
U.S. COMEX copper futures traded at a $4.806 lb, bringing the premium over LME copper to $898 a ton.
LME aluminium was up 0.4% to $2,522 a ton, zinc fell 0.5% to $2,643.5, nickel shed 0.1% to $15,055 and tin edged down 0.6% to $32,385. Lead was down 1.2% at $1,983.5.
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