Copper gains on Chinese demand, tight stocks

SINGAPORE: Copper ticked up on Tuesday, supported by fears of supply-side tightness and strong Chinese buying, despite macroeconomic demand worries from the escalation in the US- Iran war.

The benchmark three-month copper on the London Metal Exchange increased 0.29% to $13,661 a metric ton by 0300 GMT.

The most-traded copper contract on the Shanghai Futures Exchange gained 1.05% at 104,850 yuan ($15,490.65) a ton.

“Tight inventories, strong import demand and falling exchange stocks suggest copper fundamentals remain supportive in the near term,” analysts from ING said in a note.

The Yangshan copper premium, a gauge of China’s appetite for importing metal, increased to $103 a ton on Monday, its highest since May 2025.

The cash-to-three-month spread on the LME, which tracks short-term physical availability, narrowed close to backwardation, suggesting concerns about near-term availability.

Copper stocks in both LME-registered warehouses and SHFE-monitored warehouses have declined steadily since May.

Meanwhile, fighting between the US and Iran escalated, though mediation efforts offset the strikes’ impact on energy markets, and non-yielding gold edged up.

The war has weighed on copper by raising inflation and interest rate bets.

Higher interest rates weigh on growth-dependent industrial metals by dampening economic activity.

Elsewhere, aluminium edged up by 0.35% on the LME and ticked down by 0.37% on the SHFE, as the market digested lower primary production figures.

Global primary aluminium production fell 1.5% year-on-year in June, data from the International Aluminium Institute, released on Monday showed.

The light metal has been buffeted by the Middle East conflict, which disrupted supply from the region, which accounts for around 9% of global primary smelting capacity.

Among other LME metals, zinc added 0.45%, lead added 0.35%, nickel added 0.45% and tin gained 0.77%.

Elsewhere on SHFE, zinc ticked 0.14% higher, lead ticked 0.06% higher, nickel was little changed, down only 0.02% and tin added 0.33%.