Copper slips to two-week low on stronger dollar, worries about inflation
- Benchmark three-month copper on the London Metal Exchange was 0.9% lower at $13,089.50 a metric ton
LONDON: Copper prices fell to their two-week low on Tuesday due to a stronger dollar, concerns about global economic growth and fears over inflation fuelled by lingering uncertainty over the Middle East conflict.
Benchmark three-month copper on the London Metal Exchange was 0.9% lower at $13,089.50 a metric ton by 0936 GMT after hitting $13,065, for its lowest since April 14.
With the warring sides of two-month-long Middle East conflict seemingly far apart, oil and other supplies through the critical Strait of Hormuz heavily restricted, the price action in base metals is turning more selective, analysts at Sucden Financial said.
The Middle East uncertainty and softer activity in top metals consumer China weigh on the demand outlook for growth-dependent copper, while supply-side constraints support aluminium and nickel, said Ewa Manthey, commodities strategist at ING.
Attention this week is on comments from monetary policymakers on pricing pressure with the U.S. Federal Reserve, the Bank of England and the European Central Bank expected to hold rates unchanged.
LME aluminium was down 0.7% at $3,552 a ton after hitting $3,545 for its lowest since April 22. Providing support to the metal are disrupted exports from the Middle East producers, which usually account for 9% of the annual global supply.
Signalling tightness for near-term delivery, the LME cash aluminium contract ended Monday at a premium of $66 a ton over the three-month benchmark compared with the pre-war discount of $12.
Nickel was last up 0.6% at $19,210. It hit $19,540, highest since June 2024, on Monday due to worries about supplies from top producer Indonesia and disrupted supplies of sulphur needed to make the metal from the Middle East.
Among other LME metals, zinc fell 0.7% to $3,373.50. Swedish miner Boliden said on Tuesday production at its Garpenberg zinc mine will be resumed in the second quarter at a low pace.
Lead fell 0.1% to $1,957, while tin gained 0.3% to $49,325.
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