Copper prices edged lower yesterday as investors awaited more news about a potential deal to extend a ceasefire in Iran and as the dollar firmed.
Benchmark three-month copper on the London Metal Exchange slipped 0.6 per cent to $13,624.50 a metric tonne yesterday evening after gaining 1.3pc in the previous session.
LME copper rebounded on Thursday on the back of news that the US and Iran reached a preliminary agreement to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz.
“Copper is drifting lower today, it seems like we’ve got some profit-taking. We’ve certainly had a small uptrend for the last two weeks, but it’s stalling a bit,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper is on track to add about 5pc this month, the second straight month of gains, largely on hopes for a deal to end the Iran war and signs of firmer demand.
Copper was also supported by the continued flow of metal to the US as traders took advantage of a slight premium of US futures over those in London.
US Comex copper futures shed 0.4pc to $6.40 a lb, bringing the premium of Comex over LME copper to 3.5pc or $483 a tonne.
“If you take copper out of the market into the US then that helps to tighten the overall global market, so it’s difficult not to paint a picture of underpinned and supported prices going forward,” Hansen said.
LME aluminium rose 0.2pc to $3,666 a tonne, and the premium of the LME cash contract over the three-month futures climbed to a 19-year high of $97 a tonne, highlighting worries about potential shortages the war is causing in the Gulf, which accounts for about 9pc of global output.
Among other metals, LME zinc gave up 0.4pc to $3,535.50 a tonne, nickel slipped 0.6pc to $18,985 and lead dipped 0.1pc to $2,017 while tin edged up 0.1pc to $55,140.
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