LONDON: Copper prices rose on Monday as stocks in London Metal Exchange approved warehouses fell, with the market looking ahead to a US decision at the end of June on import tariffs on the metal. Benchmark copper on the LME traded 1.1 percent higher at USD13,665 a metric ton in official rings.
Industry sources said traders and funds are still taking copper from the LME to the US before any import levies are imposed, which would significantly raise shipping costs.
The US has flagged the possibility of 15percent levies on copper imports from the start of 2027 and 30percent from the start of 2028. Stocks of copper, at 376,775, have dropped 6percent over the past month. Cancelled warrants or metal earmarked for delivery at around 39percent indicate another 145,800 is due to leave the LME system. Lower LME inventories have also narrowed the discount for the cash copper contract over the three-month forward.
Traders in addition cited strong buying interest for copper from companies in China, after Friday’s 3percent drop to one-week lows as a supporting factor. On the technical front, copper upside faces resistance around the 21-day moving average currently at USD13,730, while support on the downside kicks in at the 50-day moving average around USD13,260. Elsewhere aluminium prices are expected to hold up because of restricted supplies from the Middle East - housing 9percent of global capacity - due to the US-Iran war and the closure of the Strait of Hormuz.
Higher energy costs - a major cost component in the aluminium process - are also expected to bolster aluminium prices. Generally, industrial metals have come under pressure from worries about growth due to high oil prices and the conflict in the Middle East.
A higher US currency, which makes dollar-priced metals more expensive for holders of other currencies, is also weighing on the base metals complex.
Aluminium rose 0.2percent to USD3,600 a ton, zinc firmed 0.1percent to USD3,533, lead retreated 0.4percent to USD1,997, tin fell 1.5percent to USD52,125 and nickel slipped 0.3percent to USD18,530.
Comments