Copper rally holds firm even as rising oil threatens growth outlook

Copper prices held steady despite oil prices surging above $100 a barrel, as investors looked ahead to US inflation data. Benchmark three-month copper on the London Metal Exchange dipped 0.07% to $14,757 a metric ton after touching a record high of $14,858.50 the previous day. Copper prices on the Shanghai Futures Exchange saw a slight increase of 0.49% to 111,660 yuan ($16,646.54) per ton.

Most other LME base metals declined as higher oil prices fueled inflation worries and pushed global bond yields upward. Tighter financial conditions could dampen economic growth and demand for industrial metals. Significant copper inventories persist in the United States following months of inflows ahead of possible tariffs, while tight supplies remain in other markets.

The COMEX copper inventory grew to 767,495 short tons by Wednesday. However, the LME cash copper premium against three-month fell to as low as $23.50 a ton, down from $545 in mid-August, suggesting that some copper entered LME warehouses to alleviate short-term tightness. Investors are also awaiting US consumer inflation data due on Friday, with markets pricing a 60% chance of a Federal Reserve rate hike this month.

Among other LME metals, aluminum declined 0.33%, zinc dropped 0.75%, lead fell 0.21%, and nickel edged down 0.04%, while tin rose 0.84%. On the Shanghai Futures Exchange, aluminum slipped 0.12%, zinc rose 0.09%, lead dropped 0.12%, nickel gained 0.84%, and tin jumped 1.77%.