Copper slips after strong month as lack of news on Iran deal curbs upswing

LONDON: Copper prices edged lower on Friday as investors waited for more news about a potential deal to extend a ceasefire in Iran and as the dollar firmed.

Benchmark three-month copper on the London Metal Exchange slipped 0.7percent to USD13,608 a metric ton by 1425 GMT after gaining 1.3percent in the previous session. LME copper rebounded on Thursday on the back of news that the US and Iran reached an agreement to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz.

But President Donald Trump has yet to approve it and Iranian state media said it had not been finalized. “Copper is drifting lower today, it seems like we’ve got some profit-taking. We’ve certainly had a small uptrend for the last two weeks, but it’s stalling a bit,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

LME copper is on track to add about 5 percent this month, the second straight month of gains, largely on hopes for a deal to end the Iran war and signs of firmer demand.

Copper was also supported by the continued flow of metal to the US as traders took advantage of a slight premium of US futures over those in London. US Comex copper futures shed 0.8percent to USD6.37 a lb, bringing the premium of Comex over LME copper to 3.3percent or USD451 a ton. “If you take copper out of the market into the US then that helps to tighten the overall global market, so it’s difficult not to paint a picture of underpinned and supported prices going forward,” Hansen said.

LME aluminium rose 0.2percent to USD3,666 a ton, and the premium of the LME cash contract over the three-month futures climbed to USD97 a ton, the highest since February 2007, highlighting worries about potential shortages the Iran war is causing in the Gulf, which accounts for about 9percent of global output.

Among other metals, LME zinc gave up 0.3percent to USD3,540 a ton and nickel dipped 0.4percent to USD19,030 while lead rose 0.4percent to USD2,025 and tin was little changed at USD55,100.