Copper stabilises on firmer demand, talk of Iran ceasefire

LONDON: Copper prices bounced on Wednesday after reports the U.S. was seeking a ceasefire in the Iran war and due to firmer Chinese demand, but the market was wary after Tehran denied there were any negotiations.

Benchmark three-month copper on the London Metal Exchange climbed 1.3% to $12,257 per metric ton by 1030 GMT, having slipped by 0.6% in the previous session.

“Copper seems like it’s stabilising, but we are potentially approaching the beginning of the end of the war, certainly not the end because it takes two to tango,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Israel and Iran exchanged airstrikes on Wednesday as Iran’s military rejected President Donald Trump’s assertion the U.S. was in negotiations to end the war.

The most-traded copper contract on the Shanghai Futures Exchange snapped a two-session losing streak to end daytime trade up 1.1% at 95,590 yuan ($13,864.67) per ton.

Signs of improved physical demand in top metals consumer China also supported prices.

“Now we are seeing some pent-up demand coming back at these lower prices and that will obviously also help to stabilize and over time underpin prices,” Hansen added.

“The upside technical level of $12,500 seems to be an area where the next battle could be played out.”

Firmer demand was highlighted in inventory data, showing stocks in SHFE-registered warehouses fell by 5.2% last week, the first time this year.

The Yangshan copper premium, a gauge of China’s appetite for importing copper, surged by 33% to $69 a ton on Wednesday, the strongest since June last year.

Aluminium was the only LME metal in negative territory, easing 0.7% to $3,236.50 a ton.

The lightweight metal used in transport, packaging and construction had rallied after the start of the war over supply worries since the Gulf is a major producer, but an potential end of the war could ease those concerns.

Among other metals, LME zinc added 0.2% to $3,046.50 a ton, nickel advanced 3.1% to $17,475, lead gained 0.8% to $1,907.50 and tin rose 1% to $44,675.