Copper touches 3-month peak on supply concerns, technical break

LONDON: Copper prices advanced to their highest in more than three months on Monday, as worries about supply shortages outweighed concerns about lower demand due to the stalemate in the Iran war. Benchmark three-month copper on the London Metal Exchange gained 1.1percent to USD13,715 a metric ton in official open-outcry trading, its strongest since January 29.

It was on track to notch up its sixth straight session of gains, the longest bullish run since December. It has gained about 10percent so far this year, but is well below the USD14,527.50 peak hit in January. Copper’s break above USD13,500, which had been rejected several times since February, on Friday attracted funds that use technical levels, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“That price action looks pretty robust against the not-so-robust backdrop of the war in the Middle East. That points to supply being equally challenged at a time where demand is called into question.” Copper also received support after Freeport delayed the full resumption of its flagship Grasberg mine to early 2028 from the previous expectation of late 2027.

The most-traded copper contract on the Shanghai Futures Exchange closed daytime trading 0.9percent higher at 104,620 yuan (USD15,396.39) a ton, after hitting a three-month high of 104,840 yuan.

Factory inflation in top metals consumer China beat expectations, data showed, raising hopes that the government’s efforts to boost the economy were having an impact.

LME aluminium gained 1.9percent to USD3,570 a ton in official activity on persistent worries about the impact of the conflict on producers in the Middle East, which accounts for about 9percent of global supply.

“A rapidly tightening aluminium market has left investors questioning why the LME aluminium price has not rallied more,” Morgan Stanley analyst Amy Gower said in a note.

Tin advanced 1.6percent to USD54,750 a ton after touching USD55,200 for its highest since March 2. The metal that is largely used as solder for electronics is expected to benefit from global chip shortages amid ongoing supply issues at tin operations, broker Marex said in a note.

Among other metals, LME zinc added 0.7percent to USD3,454 a ton, lead edged up 0.1percent to USD1,976 and nickel climbed 1.4percent to USD19,160.