LONDON: Copper prices ticked higher on Tuesday on worries about shortages as inventories eroded further ahead of new US spending on infrastructure.
Three-month copper on the London Metal Exchange added 0.2% to $9,655 a tonne in official open-outcry trading, after rising by 1.3% on Monday.
"The market is concerned about lack of supplies going forward and that's providing the bid we're seeing today," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"These key metals are desperately needed not only in the green transformation push but in these infrastructure plans that are being unveiled."
The $1 trillion US infrastructure bill passed last week will fund bridge and highway repair, new broadband and public transportation projects and a network of electric-vehicle charging stations across the country.
The upside was capped by worries about the ongoing property crisis in China, Hansen said.
Chinese developer Kaisa told a Chinese government think-tank it needs help to pay investors, workers and suppliers after the real estate sector was hit by a liquidity squeeze.
The real estate sector accounts for a large share of copper consumption and China is the world's biggest user of the metal.
Energy shortages in China and electricity price hikes in Europe also posed risks of reduced demand from metal users.
Nickel prices in 2022 are seen falling from this year's multi-year highs, Chinese research house Antaike said on Tuesday, with the global market expected to swing into a surplus.
LME copper inventories fell to 109,550 tonnes, the lowest since March and down by more than half over the past two months.
On-warrant LME aluminium stocks, metal not earmarked for delivery, tumbled to 599,925 tonnes, the lowest since Dec. 2005.
LME aluminium slipped 0.2% in official activity to $2,600 a tonne and nickel shed 0.1% to $19,625 while zinc advanced 0.6% to $3,291, lead rose 0.2% to $2,370 and tin added 0.1% to 37,400.