Copper hits three-week low as Middle East hostilities weigh

Business Recorder

Copper hits three-week low as Middle East hostilities weigh

Copper sank to its lowest in three weeks on Wednesday as hostilities in the Middle East and concerns about the implications for global economic growth outweighed the market impact of reduced inventories. Benchmark three-month copper on the London Metal Exchange was down 1.2% to $13,457 a metric ton at 0925 GMT. It earlier touched $13,441, its lowest since May 20. Iran’s Revolutionary Guards said they had carried out missile and drone attacks on U.S. military bases in Jordan, Kuwait and Bahrain on Wednesday in retaliation for U.S. strikes on Iranian targets around the Strait of Hormuz. The tit-for-tat action is dominating markets, said SP Angel analyst John Meyer, adding that the dollar was strong. That makes dollar-denominated metals more expensive for holders of other currencies and can depress prices. “Expectations for inflation are rising,” Meyer said. “China has been exporting deflation for many years, and now it will export more inflation.” Factory-gate inflation in China, the world’s biggest metals consumer, rose for a third straight month in May to its highest since 2022. U.S. inflation data for May will be released later on Wednesday, which could inform the Federal Reserve’s policy decision. Higher interest rates tend to lower demand prospects for growth-dependent industrial metals. LME copper stocks decreased by 3,075 tons to 369,975 tons, the lowest level since April 1. In addition, another 50 tons of warrant cancellations – or orders to withdraw copper from warehouses - in Singapore, reduced available supplies. The cancellations mean stock unavailable to the market makes up almost 38% of the total, the highest ratio since December. Shanghai Futures Exchange copper stocks fell by nearly 4% last week to 169,512 tons. The entire LME complex traded lower. Aluminium shed 1.7% to $3,483.50 per ton, zinc slipped 1.4% to $3,504.50 and nickel slid 2.3% to $17,635, touching its lowest since April 13. Lead lost 0.8% to $1,967, also hitting a three-week low, and tin dipped 1.1% to $51,845.

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