Copper heads for weekly rise despite Mideast pullback

SINGAPORE: Copper was set to end the week higher despite coming off mid-week highs, with an escalation in the Middle East war worsening inflation fears and weighing on the macroeconomic outlook for the global economy.

Benchmark three-month copper on the London Metal Exchange held firm, adding 0.11% at $13,609.5 a metric ton by 0300 GMT.

The most-traded copper contract on the Shanghai Futures Exchange fell 1.4% at 104,530 yuan ($15,426.51) a ton.

Prices are up 0.63% on the LME and 1.39% on the SHFE since the start of the week, but down from their midweek peaks when the metal rallied, supported by demand hopes, pressure on inventories, and supply concerns.

Recent developments in the Middle East have weighed on the demand outlook and on copper prices, with elevated prices pulling some buyers out of the market.

The Yangshan copper premium, a gauge of interest in importing metal to the largest consumer China, came off a multi-year high in the previous session.

Stocks in LME-registered warehouses were stable for the first time since a spree of warrant cancellations - which show metal marked for withdrawal - kicked off two weeks ago.

Brent crude ticked above $100 a barrel for the first time since May after Yemen’s Iran-aligned Houthis struck two Saudi oil tankers in the Red Sea.

The dollar ticked up, making commodities denominated in the currency more expensive for those using other currencies.

Non-yielding gold fell more than 2% after inflation fears from the conflict raised bets on higher interest rates, which can weigh on commodities by dampening economic growth.

Among other LME metals, aluminium lost 0.53%, zinc dipped 0.32%, lead lost 0.45%, nickel was little changed, up only 0.04%, and tin dipped 0.33%.

Elsewhere on SHFE, aluminium lost 0.54%, zinc lost 0.48%, lead lost 1.01%, nickel dipped 0.13% and tin dropped 1.75%.‑Reuters