LONDON: Copper traded near record highs on Wednesday, buoyed by tight supplies outside the United States.
The metal, however, retreated after two sessions of all-time peaks as hostilities in the Middle East flared, raising concerns about global growth and demand.
Three-month copper on the London Metal Exchange slipped 0.5percent to USD14,641 a metric ton by 1045 GMT after touching an all-time high of USD14,779 on Tuesday.
Oil prices rose above USD100 a barrel to six-week highs after attacks by the US and Iran escalated. “Copper is easing from record highs as investors become more cautious about the macro outlook, particularly with oil prices at USD100 a barrel, raising concerns over inflation and global growth,” said Ewa Manthey, commodities strategist at ING. LME copper has gained 25percent since hitting a three-month low in March, driven mainly by a flow of metal to the US on speculation about tariffs being imposed on refined copper there, creating shortages elsewhere.
On Tuesday, analyst Natalie Scott-Gray at brokerage StoneX estimated more than 1.2 million tons of copper have entered the US since Washington launched its Section 232 investigation into copper in February last year, leaving available material outside the country at “historically low levels”.
COMEX copper fell 1percent to USD6.76 a pound, bringing the premium of COMEX over LME copper to USD260 a ton. COMEX copper inventories continued to climb, reaching 797,275 short tons, or 723,275 metric tons as of Tuesday.
The premium of LME cash copper over the three month contract has tumbled to USD40 a ton from more than USD500 in mid-August after some inflows into LME warehouses partially eased supply worries. LME zinc rose 0.2percent to USD4,029.50 a ton after touching USD4,051.50 for its strongest since April 2022.
“Zinc’s move above USD4,000 a ton reflects a much tighter physical market, with ongoing mine supply challenges continuing to support prices,” Manthey said. Among other metals, LME aluminium dipped 0.1percent to USD3,336.50 a ton, lead lost 0.4percent to USD1,908 and nickel eased 0.1percent to USD16,845 while tin gained 0.7percent to USD55,260.