Copper falls as Middle East war weighs on demand outlook
XLB•Other base metals mostly decline
Aluminium CMAL3 fell 0.8% to $3,157.50 a ton, nickel CMNI3 lost 0.9% to $16,995 and zinc CMZN3 slipped 2% to $3,520.50, while lead CMPB3 added 0.5% to $1,881.50 and tin CMSN3 rose 0.3% to $53,240.
Copper prices slip on Middle East tensions
Copper prices fell on Friday as escalating tensions in the Middle East spurred inflation concerns and cast a shadow over the demand outlook for the metal.
Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.6% at $13,515.50 a metric ton as of 1600 GMT, having earlier dipped as much as 1.6%, and on course to eke out a weekly gain of 0.2%.
The escalation in fighting between the U.S. and Iran has disrupted shipping through the Strait of Hormuz, pushing oil prices LCOc1 up 14% this week and increasing fuel costs for metal producers. O/R
U.S. stock market futures slid on renewed attacks in the Gulf and a selloff in chip stocks, while President Donald Trump's accusations that China meddled in U.S. elections, firmly denied by Beijing, risked fanning tensions between the world's two biggest economies.
Tariff uncertainty and inventory levels shape the outlook
COMEX copper HGcv1 was down a steeper 1.1% at $6.27 per lb, with the White House yet to announce a proposed import tariff on refined copper.
"Without a clear directional catalyst from tariffs, we see copper trading lower in the coming months due to lacklustre industrial demand and a relatively benign hit to supply from the U.S.-Iran conflict," BMI, a unit of Fitch Solutions, said in a note.
Tight inventories were nonetheless offering support. LME copper stocks MCUSTX-TOTA slipped below 300,000 tons to 296,625 tons, the lowest since March, and almost 56% are cancelled warrants unavailable to the market.
