LONDON: Copper prices retreated on Tuesday as Israel’s strike on a port city in Lebanon strained efforts to broker a peace deal to end the wider Middle East war and affected overall risk sentiment ahead of crucial US inflation data.
Benchmark three-month copper on the London Metal Exchange fell 0.2 percent to USD13,585 a metric ton by 1611 GMT. Global equities fell alongside gold and oil prices, as markets awaited US inflation data due on Wednesday for clues on the Federal Reserve’s next moves.
The premium at which COMEX copper contracts are trading over the LME benchmark provided some support to copper prices ahead of a recommendation from the US Department of Commerce on possible import tariffs.
The premium is attracting inflows to COMEX copper stocks in the US, while available stocks in LME-registered warehouses were at 228,650 tons, according to daily LME data, the lowest since February 19.
Analysts at Morgan Stanley expect a decision on US copper import tariffs sometime in the second half of 2026, once President Donald Trump has received an update on domestic markets due by end-June.
An advanced notice of a 15 percent tariff from January 2027 would drive COMEX and LME copper higher and tighten LME spreads, while ruling out tariffs would remove about 2.5 percent of annualised global copper demand going to the US for stockpiling, Morgan Stanley said in its note.
Its analysts estimate year-to-date “over-importing” by the US at 260,000 tons, with the country holding over a year of “normal” refined copper imports in inventory.
Among other LME metals, aluminium fell 2 percent to USD3,529.50 after hitting a one-month low of USD3,527.5. China’s aluminium exports surged in May amid disrupted shipments from the Gulf. Zinc rose 0.3 percent to USD3,548. Goldman Sachs said Boliden’s Garpenberg mine could “structurally reset to a lower production level for longer” following a seismic event in March.
Lead fell 0.5 percent to USD1,980, tin eased 0.3 percent to USD52,070, while nickel was down 1.6 percent at USD18,055, having hit USD18,005 earlier, its lowest level since April 17.
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