Copper slips from record highs on Middle East worries

London: Copper prices slipped from record highs on Wednesday as Middle East tensions escalated, prompting worries about global economic health and demand for metals. The three-month copper contract on the London Metal Exchange declined 0.5% to $14,641 per metric ton by 0945 GMT, following a peak of $14,779 on Tuesday. Oil prices surged above $100 a barrel, reaching six-week highs, following intensified attacks by Iran and the U.S. in the ongoing six-month conflict.

Ewa Manthey, a commodities strategist at ING, commented, "Copper is easing from record highs as investors become more cautious about the macro outlook, particularly with oil prices at $100 a barrel, raising concerns over inflation and global growth." Copper prices have risen 17% this year, primarily due to metal shipments to the U.S. amid speculation of tariffs on refined copper, resulting in shortages elsewhere.

Analyst Natalie Scott-Gray at StoneX estimated over 1.2 million tons of copper had entered the U.S. since Washington initiated its Section 232 investigation into copper in February 2022, leaving global stockpiles at "historically low levels." COMEX copper fell 0.9% to $6.76 per pound, widening the premium between COMEX and LME copper to $267 per ton.

COMEX copper inventories grew to 797,275 short tons, or 723,275 metric tons, as of Tuesday. LME zinc increased 0.3% to $4,032 per ton, its highest since April 2022, as tight physical market conditions persist.