Copper fell to its lowest in more than five weeks on Thursday as further inflows into London Metal Exchange warehouses eased some supply fears, even though expectations of regional supply bottlenecks persisted outside the US.
Benchmark three-month copper on the LME was down 1.8% at US$14,089 ($20,107) a tonne as of 16:00 GMT. It hit a session low of US$14,031, its weakest since 15 September.
Copper stocks in LME warehouses climbed for a fourth day after 29,050 tonnes of inflows on Wednesday, chiefly in the US storage hub of New Orleans.
Total LME copper stocks now stand at 272,950 tonnes, the highest since 24 July, after earlier flows into New Orleans and Baltimore this week. Around 62% of all LME copper inventories are currently in the US.
Alastair Munro, senior metals strategist at broker Marex, said the recent build in LME copper stocks was the result of the Comex premium shrinking as contract delivery dates draw closer.
Traders have been shipping copper to the US Comex exchange for much of this year, attempting to head off potential import tariffs on the metal, pushing Comex prices higher than LME prices.
However, the front of the curve now shows Comex trading at a discount to the LME, encouraging flows on to the LME instead. The backwardation on the LME – a market structure where prices for prompt delivery are higher than those further forward – has also incentivised deliveries.
The cash LME copper contract was last trading at a premium of US$116 a tonne to the three-month forward contract, indicating ongoing near-term tightness.
Elsewhere, sell-off in equity markets on doubts over the AI outlook weighed on the industrial metals complex.
Aluminium fell 1% to US$3,010 a tonne, zinc lost 2.2% to US$3,670 and lead dipped 0.7% to US$1,896.50, even after there was an order to withdraw 46,800 tonnes of the metal from warehouses in Singapore.
Nickel slid 1% to US$16,060 after a 3.7% jump in the previous session on signs of production cuts in Indonesia, while tin dropped 1.7% to US$50,330.
(Reporting by Tom Daly; Additional reporting by Solomon Cefai; Editing by Tasim Zahid and Diti Pujara)
Image: Codelco
