LONDON: Copper prices rebounded on Friday after US President Donald Trump pushed back a decision on US military involvement in the Israel-Iran conflict, but gains were capped by uncertainty over tariffs and Chinese demand.
Three-month copper on the London Metal Exchange was up 0.4% at $9,654 a metric ton by 1400 GMT. Earlier in the session, prices hit the weakest since June 13 at $9,558.50.
Most metals moved higher along with stock markets after news emerged that Trump will decide in the next two weeks whether the US will get involved in the Israel-Iran air war and as Europe tried to coax Tehran back to negotiations.
“We’ve got the geopolitical uncertainty in the background although maybe a little bit of a reprieve on that side in the sense that Trump wants to allow a bit more time for diplomacy,” said Nitesh Shah, commodity strategist at WisdomTree.
“But we still have all the trade fears, which may have become a secondary feature over the last week. It’s not that far down the line before the expiry of the 90-day pause on the Liberation Day tariffs.” The 90-day pause in Trump’s broadest “reciprocal” tariffs will end on July 8.
Premiums for nearby LME copper contracts have jumped to their highest since October 2022 because of low inventories and large holdings of cash contracts and warrants, traders said.
Copper stocks in LME registered warehouses at 99,200 tons have dropped more than 60% since the middle of February and are at their lowest since August 202.
Much of the outflow of LME stocks has been to the United States to take advantage of higher copper prices there in anticipation of US tariffs being imposed.
US Comex copper futures dipped 0.3% to $4.84 a lb, bringing the premium of Comex over LME copper to $1,016 a ton. A Shanghai-based metals analyst at a futures firm said in addition to the Middle East and US interest rates, investors were concerned about weaker demand in top metals consumer China.
Among other metals, LME aluminium gained 0.7% to $2,540 a ton, zinc rose 0.4% to $2,651.50 and tin climbed 1.5% to $32,490 while nickel shed 0.4% to $14,995 and lead dipped 0.1% to $1,989.50.
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