LONDON: Copper prices held steady on Thursday as sentiment was supported by hopes for easing tensions between the United States and Iran, a softer dollar and signs of strong demand in top consumer China, traders said.
Benchmark copper on the London Metal Exchange was down 0.1 percent at USD13,372.5 a metric ton at 1602 GMT.
Prices of the metal used in the power and construction industries had touched USD13,462 on Wednesday, the highest since April 23. US President Donald Trump predicted a swift end to the war with Iran as Tehran considered a US peace proposal that sources said would formally end the conflict.
“The market is now pausing as traders wait for further clarity on the diplomatic track between the US and Iran, with Tehran reviewing a new proposal that could outline a path toward reopening the Strait of Hormuz,” Britannia Global Markets analysts said.
“With markets awaiting the next round of geopolitical headlines and macro signals, trading is likely to remain choppy.”
A softer dollar reduces the cost of dollar-denominated metals for buyers holding other currencies, which can support demand.
Signs of healthy demand in China are helping to underpin copper prices.
Copper stocks in warehouses monitored by the Shanghai Futures Exchange have more than halved to 192,025 tons since mid-March.
Meanwhile, the Yangshan copper premium , a gauge of China’s appetite for importing copper, is up more than 60 percent since early March.
Elsewhere, battery material lead touched USD1,990 a ton for its highest since February 27. It was last up 0.1 percent at USD1,980 a ton.
Traders said large holdings of lead warrants and a 40 percent plus <0#LME-FBR> holding of lead contracts maturing in May were behind the gains. The concentration of holdings suggests that much of the LME’s deliverable lead is tied up ahead of the May expiry, heightening the risks of a supply squeeze.
Aluminium slipped 1 percent to USD3,488 a ton, zinc rose 1.6 percent to USD3,455, tin was up 0.5 percent at USD54,105 and nickel retreated 0.6 percent to USD19,090.
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