LME copper set for third weekly decline on growing inventories, low liquidity

LME copper eased on Friday, set for a third week of decline, with the markets in top consumer China on the Lunar New Year break with rising inventories and a firmer US dollar weighing on the red metal.

Benchmark copper on the LME was down 0.1% at $12,793 a metric ton as of 0351 GMT and was down 0.7% for the week.

The Shanghai Futures Exchange will reopen on February 24.

Industrial metals are retreating as demand softens and supply dislocation is set to normalise, analysts at ANZ noted, adding that copper inventories are replenishing globally.

Copper stocks in LME-approved warehouses increased by 925 tons to 225,575 tons on Thursday, the highest since March 2025. Meanwhile, CME Group has received an application to list a copper warehouse in a suburb of Chicago, a notice from the US commodity exchange operator shows, as the prospect of import tariffs has led traders to stockpile.

“We see key support on 3-month copper at two levels – $12,528/ton and 12,414/ton – the latter being the more critical level that needs to hold,” said Marex analyst Edward Meir in a note.

On Friday, the dollar was poised to cap its strongest weekly performance since October, buoyed by a run of better-than-expected economic data, a more hawkish Federal Reserve outlook, and tensions between the US and Iran kept markets on edge.

  A stronger dollar makes greenback-priced metals more expensive for holders of other currencies.

In other metals, zinc prices ticked up 0.1% to $3,342.50, and nickel was steady at $17,280 a ton.

Aluminium rose 0.4% to $3,079, while lead lost 0.2% to $1,951.

“Mine disruptions in Chile and Peru, and growing signs that new projects won’t come online fast enough to meet demand, are propping up base metals,” KCM Trade chief market analyst Tim Waterer said, adding that low inventories and mine closures, delays underpinned prices for nickel and zinc.