LONDON: Copper prices eased on Thursday, weighed down by concern over slow progress by the US and Iran in forging a peace deal and the risk of weaker metals demand from a prolonged conflict.
Benchmark three-month copper on the London Metal Exchange lost 1.3percent to USD13,480 a metric ton in official open-outcry trading after climbing by 1.8percent in the previous session.
LME copper has gained 8percent this year but has pulled back from the USD14,196.50 touched last week for its highest in more than three months.
“For now, geopolitics is setting the tone; but without a clear demand catalyst, copper is struggling to hold on to record-high momentum,” said ING commodities strategist Ewa Manthey.
Six weeks since a fragile ceasefire took effect, talks to end the war have made little progress, although Pakistan stepped up diplomatic efforts on Thursday. Investors are trying to balance the impact of potential supply tightness because of mine disruptions and shortages of sulphuric acid against the threat of eroding demand owing to higher inflation and weaker economic growth.
“The base metals market remains wary of demand losses stemming from elevated energy prices and the conflict’s implications for global growth and inflation,” said Standard Chartered analyst Sudakshina Unnikrishnan.
LME aluminium added 0.7percent to USD3,648 a ton, helped by the buying of options by bullish investors betting on further disruptions in the Gulf. The region accounts for about 8percent to 9percent of global output.
LME nickel shed 1percent to USD18,740 a ton as investors absorbed details of a new Indonesian policy to place exports of some nickel products under state control.
Among other metals, zinc fell 0.6percent to USD3,533.50 a ton, lead nudged 0.5percent higher to USD1,990 and tin dropped 2percent to USD52,950.
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