Copper edges down as macro concerns weigh on tariff support
- The most-traded copper contract on the Shanghai Futures Exchange was down 0.38% to 104,010 yuan ($15,354.52) a ton
SINGAPORE: Copper edged lower on Wednesday morning, as volatility in the Middle East conflict and macroeconomic concerns offset continued price support from U.S. tariff expectations.
Benchmark three-month copper on the London Metal Exchange declined 0.36% to $13,566.5 a metric ton as of 0300 GMT.
The most-traded copper contract on the Shanghai Futures Exchange was down 0.38% to 104,010 yuan ($15,354.52) a ton.
Oil prices rose on Wednesday after the U.S. launched new strikes on Iran.
The war in the Middle East has pushed energy prices up and strained manufacturing, a key sector for copper demand.
Official data released on Wednesday showed China’s producer prices rising for a third straight month in May, to the highest level since 2022, driven by rising commodity prices and improved demand in certain industries.
Inflation concerns also remained front of mind, with markets looking to U.S. inflation data that’s set to be released later on Wednesday. Better-than-expected U.S. jobs data last Friday boosted the dollar and raised the likelihood of a Fed rate hike this year, rattling the copper market.
Higher interest rates generally dampen the demand prospects for growth-dependent industrial metals.
Price support continued to come from expectations of a decision on U.S. copper tariffs, likely in the second half of the year. The U.S. has floated a possible 15% levy on copper imports from the start of 2027, followed by 30% from 2028.
Total copper stocks in LME-registered warehouses have declined each day since May 28, according to LME data.
Among other LME metals, aluminium dropped 1.54%, zinc lost 0.58%, lead lost 0.55%, nickel lost 0.77% and tin dropped 1.86%.
Elsewhere on SHFE, aluminium lost 0.89%, zinc dipped 0.2%, lead lost 0.59%, nickel dropped 2.19% and tin dropped 2.16%.