LONDON: Copper prices fell on Friday under pressure from a stronger dollar, but remained on course for their biggest monthly rise in eight months due to tighter nearby supply, highlighted by the premium for nearby copper contracts against those further out.
Benchmark three-month copper on the London Metal Exchange (LME) lost 0.6% to $9,510 a metric ton by 1602 GMT. The contract is up 4.2% so far in May, on track for its strongest month since September. The price advance is supported by declining stocks in LME-registered warehouses, down 45% since mid-February to 149,875 tons, the lowest in almost a year.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 7.2% this week. As Washington continues an investigation into whether to impose new US copper import tariffs, the premium of COMEX copper against the LME benchmark remains elevated, attracting more metal into COMEX-owned warehouses.
“The LME copper is facing a bit of a squeeze because the COMEX stocks keep going up and the LME stocks are declining,” said Dan Smith, managing director at Commodity Market Analytics. The spread between the cash LME and the three-month copper contract closed on Thursday at a premium of $51.6 a ton, highest since November 2022, indicating worries about nearby supply, partly due to a large holding of copper warrants and cash contracts.
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