Backwardation, a market structure where prices for prompt delivery are higher than those for future supplies, was also a feature of the aluminium CMAL0-3 and zinc CMZN0-3 spreads, with inventories of those metals also thin.
LME three-month aluminium CMAL3 nudged up 0.2% to $3,185 per ton, zinc CMZN3 rose 0.9% to $3,600, tin CMSN3 added 0.6% to $54,200, lead CMPB3 edged down 0.1% to $1,898 and nickel CMNI3 nudged up 0.1% to $17,160.
Copper rises as inventories tighten and dollar weakens
LONDON, July 30 (Reuters) - Copper moved higher on Thursday as concerns around tight inventories outside the U.S. resurfaced and prices were supported by a weaker dollar after the Federal Reserve opted to keep interest rates steady.
Benchmark three-month copper CMCU3 on the London Metal Exchange was up 1.4% to $13,767 per metric ton in official open outcry activity, after declining in the previous two sessions.
The dollar index =USD edged down 0.1%, having hit a one-week low in the previous session as markets gauged possible Fed interest rate paths. A cheaper dollar can boost greenback-denominated commodities by making them more affordable for buyers using other currencies.
Dwindling inventories, supply concerns and demand from China also offered support for copper, which is widely used in power, construction and manufacturing.
Analyst says market is shifting toward physical tightness
"The market is increasingly transitioning from one driven primarily by macro sentiment towards one characterised by genuine physical tightness," StoneX analyst Natalie Scott-Gray wrote, noting weather-related disruption to mine supply and falling stocks on the LME and Shanghai Futures Exchange.
"These developments suggest tightening availability rather than purely speculative positioning," she said.
Copper stocks fall while U.S. inventories remain elevated
LME copper stocks MCUSTX-TOTAL declined by 6,900 tons to 255,400 tons, the lowest since February. The cash LME copper contract was trading at a $25-a-ton premium over the three-month forward CMCU0-3, underscoring tight near-term supply.
ShFE copper stocks CU-STX-SGH of less than 70,000 tons are the lowest since February 2024.
COMEX copper stocks HG-STX-COMEX, meanwhile, stood at a record 644,465 metric tons, almost double the LME and ShFE inventories combined, as metal continues to flow to the U.S. ahead of possible import tariffs.
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