Copper eases, aluminium gains as Iran denies talks to end conflict

LONDON: Copper lost ground on Thursday as elevated inventory levels and macroeconomic concerns pressured the metal, while aluminium rose to its highest in almost a week after Iran denied holding talks to wind down the conflict in the Middle East.

Benchmark three-month copper on the London Metal Exchange was down 0.4% to $12,267.50 per metric ton as of 1030 GMT, having fallen as much as 1.7% earlier in the session.

The metal widely used in power and construction closed up 1.8% on Wednesday thanks to a bout of dip buying by Chinese consumers looking to restock, traders said, as well as a softer dollar, which makes dollar-denominated metals more affordable for holders of other currencies.

Copper, considered a bellwether for the health of the global economy, is under pressure due to concerns that the U.S.-Israeli war on Iran will hurt growth.

Furthermore, copper stocks in LME-approved warehouses remain at a nearly eight-year high of about 360,000 tons and are up around 150% since the start of the year.

“I think copper was under pressure before the conflict started, just because of the buildup of physical copper in warehouses,” said SP Angel analyst John Meyer.

U.S. President ​Donald Trump said Iran was desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign minister, who said his country was reviewing a U.S. proposal but had ​no intention of holding talks to end the conflict.

Aluminium meanwhile rose 1.5% to $3,290.50 a ton, touching its highest since March 20 on fears that smelters in the Middle East, which account for around 9% of global supply, will be unable to send metal to world markets and bring in raw materials.

Zinc gained 1.1% to $3,112, lead lost 0.9% to $1,894, nickel slipped 0.6% to $17,235 and tin eased 0.7% to $44,195.