Copper hits fresh high on fund buying despite fading Iran peace hopes

LONDON: Copper prices edged to a three-month peak on Tuesday as funds bet on further gains due to supply issues and bullish technical signals, largely ignoring worries about the lack of progress in ending the Iran war.

Benchmark three-month copper on the London Metal Exchange was up 0.6percent at USD14,023.50 a metric ton by 1410 GMT, its highest in more than three months and after posting a record close on Monday. Hopes for a peace deal on Iran faded on Tuesday after US President Donald Trump said the ceasefire with Iran was “on life support.” “Metals paused overnight and drifted amid that macro weight,” said Alastair Munro, senior base metals strategist at broker Marex.

“But since the London open a systematic bid has emerged on likes of copper, aluminium and zinc,” he added, referring to funds that use computer-driven models.

Bullishness over an AI boom that is expected to require large amounts of copper for data centres helped offset any worries about weaker demand from an extended Middle East conflict, Munro added.

LME copper broke above key technical levels in recent sessions as it moved closer to its intra-day record high of USD14,527.50 hit on January 29.

The most-active copper contract on the Shanghai Futures Exchange, closed 2.1percent higher at 105,510 yuan (USD15,528.28) a ton. Also supporting copper were power issues in Peru, the world’s third-largest copper producer, which authorised state-run Petroperu to seek USD2 billion in state-backed loans to sustain operations. Expectations that China’s refined copper imports could rise in the second quarter also helped prices. LME zinc gained 1.6 percent to USD3,536.50 a ton and lead added 0.3percent to USD1,993 after Kazzinc said its zinc and lead plants in eastern Kazakhstan were operating at reduced capacity after an explosion last week.

Among other metals, aluminium lost 0.3percent to USD3,568 a ton, nickel shed 1.6percent to USD18,950 and tin shed 1.3percent to USD54,990.