LONDON: Copper prices rose on Monday as oil prices fell after the US and Iran suspended hostilities, easing concerns about price pressures and global economic growth.
Benchmark copper on the London Metal Exchange traded 0.9percent up at USD13,770 a metric ton in official rings. After 13 nights of intensifying US airstrikes on Iran, the Pentagon suspended the campaign on Friday. Iran, which had been following each night of US attacks with its own strikes on neighbouring countries that host US bases, has held fire for two days.
Oil prices tumbled as the pause in fighting raised hopes of a diplomatic solution that would allow shipping to resume in the Strait of Hormuz.
“The market is now waiting for some sort of resolution and it is trying to price in peace rather than an ongoing war,” said Panmure Liberum analyst Tom Price.
“Chile has been hit by unusual storms, putting pressure on the power distribution grid and raising questions about copper production guidance across the industry.” Chile accounted for 23percent, or 5.3 million tons, of mined copper production globally last year, according to US Geological Survey.
Traders said the market was also focused on copper stocks in LME-approved warehouses. At 272,975 tons, stocks have dropped 30percent since the end of May.
Producers and traders have been shipping copper to the United States since February last year, when President Donald Trump threatened import tariffs, creating a premium for US copper over LME prices. The US Commerce Department was due to complete a review of the copper market by June 30, but Trump has not yet announced a decision on tariffs.
“The movement of copper into the United States tightens short-term supply elsewhere because that is what inventories are: short-term supply,” Panmure Liberum’s Price said.
In other metals, aluminium gained 0.6percent to USD3180 a ton, zinc rose 0.8percent to USD3,619, lead was up 0.4percent at USD1,894 and tin climbed 1.4percent to USD54,545 while nickel was little changed at USD17,375.
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