Copper climbs on Gulf de-escalation hopes, softer dollar

LONDON: Copper rebounded on Thursday as the market hoped for another de-escalation in hostilities in the Gulf and the dollar dipped after its recent surge.

Benchmark three-month copper on the London Metal Exchange was up 2.1% at $13,437 a metric ton as of 0920 GMT. The metal had dropped 1.5% on Wednesday on demand concerns after U.S. President Donald Trump said the memorandum of understanding with Iran to end the Gulf conflict was “over.”

Trump has since said Tehran wants to “make a deal so badly” and that he did not expect a return to full-fledged war, even as the two countries traded attacks.

“The bounce can only relate to Trump making his claim,” said Panmure Liberum analyst Tom Price. “Whether it’s true or not, who knows, but the market is always willing to buy some sort of peace pitch by Trump. And if you’re into short-term trading, that’s an exciting opportunity for you right there.”

Copper inventories in LME warehouses slipped to 307,750 tons, the lowest since March 9. Even so, the cash LME copper contract was trading at a $68-a-ton discount to the three-month forward on Wednesday, suggesting no pressing need for near-term metal.

The cash aluminium contract was meanwhile commanding a slight premium of $3.75, after 13 straight days of contango where forward prices were higher.

Aluminium climbed 1.2% to $3,169 a ton, striking a more than one-week high after falling below pre-war levels at the end of last month. LME aluminium stocks of 289,225 tons are the lowest since September 2022.

Industrial metals prices were higher across the board, spurred by a dip in the dollar, making greenback-denominated metals more affordable for holders of other currencies, and concerns over inflation due to higher fuel prices.

Zinc gained 2.5% to $3,605.50, notching its highest since June 22, while nickel added 1.4% to $16,565, tin jumped 2.2% to $53,175 and lead edged up 0.4% to $1,898.50.