Copper Slides to Three-Week Low on Inventory Build
LME copper fell to $14,005.50 per metric ton, its lowest level since mid-August, as rising warehouse stocks and a stronger dollar offset prior supply fears.
Three-month LME copper dropped 1.6% to $14,005.50 per metric ton at 16:00 GMT. The metal touched $13,958, marking a three-week low. This decline follows a 6.2% drop from the record high set last Thursday. The price retreat erased gains made during the recent rally.
LME inventories increased by 9,600 tons. This includes 4,550 tons delivered to warehouses in Italy. The cash copper contract discount widened to $39.25 per ton from $10 on Friday. These figures indicate that immediate supply conditions are no longer as tight as previously believed.
Dollar Strength Weighs on Demand
A stronger US dollar added pressure to industrial metals. Investors are assessing the impact of potential higher interest rates. The Federal Reserve holds its policy meeting this week. Higher borrowing costs can reduce demand for commodities. This monetary uncertainty contributed to the cautious market tone.
US Tariff Uncertainty Halts Arbitrage
COMEX copper stocks fell to 767,504 short tons. This ended a streak of 58 consecutive daily increases. The decline occurred after reports that the White House has not decided on tariffs for refined copper. This uncertainty reduced the incentive to move copper into the US exchange. The arbitrage opportunity that drove inventory builds has narrowed.
Broad Industrial Metals Decline
Aluminium fell 0.3% to $3,242 per ton. Zinc dropped 2.1% to $3,798, also hitting a three-week low. Lead declined 0.6% to $1,880.50. Nickel and tin also recorded losses, with tin dropping 2.4% to $52. The broad-based weakness reflects a shift in market focus from supply tightness to macroeconomic risks. According to GN auto markets/commodities: copper prices, the sector is now driven by inventories and trade policy.
