London copper slipped on Tuesday, giving up most of the previous session’s relief rally, after Iran denied holding talks with the United States to end the war in the Middle East and launched fresh missile attacks on Israel.
Benchmark three-month copper on the London Metal Exchange fell 1.4% to $11,991.50 a metric ton as of 1000 GMT. It had closed up 2% on Monday after U.S. President Donald Trump spoke of “very good and productive” negotiations with Tehran and postponed threatened strikes on Iranian energy infrastructure.
Copper is easing today after yesterday’s bounce, as geopolitical optimism faded,” said ING analyst Ewa Manthey.
A rebound in oil prices, together with a firmer dollar, added to pressure on industrial metals by raising fears that central banks will have less room to cut rates and that higher fuel costs will sap global growth.
Citi now expects copper to fall to $11,000 a ton in the next three months, compared with $14,000 previously.
“We expect industrial metals to grind lower while the Hormuz Strait remains closed, as investors discount Fed rate cuts and cyclical growth expectations and continue broad de-risking across risk assets,” the bank said.
Elevated LME copper stocks of 359,275 tons, the highest in almost eight years, were also weighing on prices. There were another 11,800 tons of inflows on Monday, more than half of which entered LME warehouses in Kaohsiung , exchange data showed on Tuesday.
The spread between the cash LME copper contract and the three-month forward remains in a steep contango of around $79 a ton. Still, renewed buying interest in top consumer China – where exchange copper stocks fell 5.2% last week – is “helping to limit the downside,” Manthey added. Elsewhere, aluminium edged down 0.2% to $3,193 a ton, as Gulf smelters try new routes to get their metal to export markets.
Zinc fell 0.5% to $3,060, lead lost 0.2% to $1,894, nickel slipped 0.7% to $16,960 and tin nudged up 0.1% to $43,925.
