Copper falls as rising inventories cool supply worries

SINGAPORE: Copper prices fell on Thursday as inflows into London Metal Exchange warehouses relieved some supply fears, even though regional supply bottlenecks persisted outside the US.

Benchmark three-month copper on the LME was down 0.44% at $14,293.5 a metric ton by 0300 GMT.

The most-traded copper contract on the Shanghai Futures Exchange fell 0.67% to 109,000 yuan ($16,331.79) a ton.

Total copper stocks in LME-registered warehouses have increased for three consecutive days.

On Wednesday, 13,525 tons of copper were delivered into warehouses, exchange data showed.

Unlike in the previous two days when deliveries were concentrated in the US, Wednesday’s inflows were more dispersed and came into South Korea, the US, the Netherlands, and other locations, analysts from Chinese broker Galaxy Futures wrote in a note.

Stocks have been pulled into the US for much of the year so far as traders attempted to head off potential import tariffs on the red metal, supporting prices.

High regional premiums, paid on top of LME prices, nonetheless underscore expectations of regional shortages.

Chile’s Codelco is offering its European customers copper at a record high premium of $350 a ton, while Germany’s Aurubis has also set its premium at a record high for next year.

The Yangshan copper premium - a gauge of China’s appetite for imported copper - rose to $148 a ton on Wednesday, its highest since October 2022.

And the LME cash-to-three-month spread was at a backwardation of $116.34 a ton on Wednesday, suggesting tight near-term availability. Among other LME metals, aluminium lost 0.59%, zinc lost 0.68%, lead lost 0.65%, nickel lost 1.01% and tin lost 1.28%.

On the SHFE, nickel stood out, gaining 1.46% on unconfirmed prospects of Chinese producers in Indonesia cutting production.

Elsewhere on the Chinese exchange, zinc was down 0.02%, lead dipped 0.15% and tin lost 1.29%.