Copper rises as LME, Shanghai inventories fall; oil steadies

Copper prices rose on Tuesday, supported by falling inventories, while oil steadied with conflicting US and Iranian statements clouding the prospect of a diplomatic resolution to the months-long war.

The benchmark three-month copper on the London Metal Exchange was up 0.60% at $13,953 a metric ton by 0331 GMT, while the most-traded copper contract on the Shanghai Futures Exchange gained 0.91% to 106,700 yuan ($15,792.90) a ton.

Copper stocks in LME-registered warehouses fell to 244,025 tons as of Friday, down from around 400,000 tons in April.

Inventories tracked by the SHFE have dropped to about 69,300 tons from more than 430,000 tons in March.

The declines have tightened immediately available supply outside the United States. By contrast, COMEX copper inventories climbed to 717,314 short tons on August 3, continuing a steady rise from around 340,000 short tons late last year. Weekly copper imports to the US remained at a high level, Chinese broker Jinrui Futures said in a note.

The broker also said downstream consumption in China is drifting weaker due to higher prices.

Oil prices steadied after plunging in the previous session, as concerns over Middle Eastern supply persisted despite US President Donald Trump saying talks with Iran were under way. Brent crude futures rose more than 1% on Tuesday.

But that’s after dropping 7% on Monday to a three-week low.

Trump said on Monday that negotiations were taking place and described them as Iran’s “last chance” to reach an agreement.

However, Iran’s foreign ministry denied that talks were being held or that any meetings were scheduled.

Shipping through the Strait of Hormuz remains disrupted, leaving copper vulnerable to risks to energy supplies and transport costs.

Elsewhere, nickel rebounded after leading losses on Monday.

The benchmark nickel on the LME rose 1.61%, while the most-active nickel contract on the Shanghai exchange climbed 1.55%.

Traders said the market is waiting for the Indonesian government to give a clearer guidance in the issuance of new nickel mining quotas.

Among other LME metals, aluminium rose 0.68%, zinc added 0.37%, lead gained 0.83% and tin was up 0.62%.

Elsewhere on SHFE, aluminium rose 1%, zinc dropped 0.58%, lead added 0.23%, and tin gained 0.81%.