Copper advances as investors buy over supply concerns

Copper advanced to a three-month high on Wednesday as investors continued to buy on future supply concerns as uncertainties in the Middle East kept oil prices high and higher-than-expected U.S. inflation dimmed hopes for any near-term rate easing.

The benchmark three-month copper on the London Metal Exchange rose 0.83% to $14,137.50 a metric ton as of 0700 GMT after reaching $14,196.50, a more than three-month high.

The most-active copper contract on the Shanghai Futures Exchange closed daytime trading 1.67% higher at 108,510 yuan ($15,980.15) a ton, after also reaching an over three-month high of 108,900 yuan.

Freeport-McMoRan maintained its end-2027 timeline for a full recovery at its Grasberg mine in Indonesia, while traders monitored risks to the mining industry in Peru over fuel after state-run Petroperu sought $2 billion in state-backed loans.

Copper broke out of a prolonged trading range and climbed above $13,500 a ton with little resistance on the upside, analysts at Chinese broker Galaxy Futures said, adding that momentum buying and stronger sentiment quickly pushed prices higher.

The red metal, often dubbed “Dr. Copper” for its role as a bellwether of the macroeconomy, is heading into its eighth consecutive day of gains despite unfavourable macro factors.

Oil prices slipped on Wednesday but remained elevated, with Brent above $106 a barrel, as investors watched a fragile ceasefire in the Iran war and awaited U.S. President Donald Trump’s meeting with Chinese President Xi Jinping.

Higher energy prices are feeding through into inflation. U.S. consumer prices rose 3.8% in the 12 months through April, the biggest increase since May 2023, while markets have largely priced out any chance of a Federal Reserve rate cut this year.

A stronger-for-longer rates outlook typically weighs on dollar-priced metals by lifting the U.S. currency and raising financing costs.

Among other metals on the LME, aluminium gained 1.07%, zinc added 0.45%, lead rose 0.55%, nickel increased 1.04% and tin advanced 1.46%.

Elsewhere on SHFE, aluminium rose0.97%, zinc climbed 1.78%, lead ticked 0.15% higher, nickel was up 0.17%, and tin gained 0.99%.