Copper steadies as dollar strength counters Chile supply worries

Copper prices remained relatively stable on Tuesday as a strong US dollar offset the positive impact of supply concerns from Chile, the world's leading producer. The benchmark three-month copper price on the London Metal Exchange dropped 0.2% to $14,590.50 per metric ton, after reaching a two-week high the day before. The Shanghai Futures Exchange's most-traded copper contract held steady at 110,720 yuan per ton.

The US dollar had been hovering close to an 18-month peak, boosted by safe-haven demand due to escalating tensions in the Middle East. A stronger greenback makes dollar-denominated metals pricier for holders of other currencies.

Supply worries persisted after a landslide partially suspended operations at Chilean state miner Codelco's El Teniente mine and Antofagasta's Centinela copper mine, along with two mines involved in ongoing strike talks. Copper inventories outside the United States have been shrinking in recent months as shipments have been redirected to the country ahead of potential tariffs on refined copper imports, according to analysts at BMI.

They recently raised their average copper price forecast for 2026 from $12,700 to $13,500 per ton, citing tariff-related market distortions and ongoing supply constraints.

BMI forecast prices to "oscillate sharply" in the latter part of the year in response to tariff-policy headlines, with the eventual US decision likely to dictate the near-term price direction. Among other LME metals, aluminum fell 0.4% to $3,039, zinc declined 0.6% to $3,735, lead remained flat at $1,882, nickel slipped 0.2% to $15,585, and tin eased 0.7% to $52,810. Aluminum, zinc, lead, nickel, and tin all experienced minor declines in the Shanghai Futures Exchange.