Copper holds near US$14,000 as new deliveries signal supply relief

Copper steadied after declining to near US$14,000 a tonne as fresh deliveries of stockpiles to exchange-tracked warehouses signalled an easing of a supply squeeze.

Futures on the London Metal Exchange were little changed on Tuesday after their lowest close in four weeks. Prices have pulled back sharply since rallying to a record high last week, when traders were diverting supplies to the US in anticipation of tariffs on refined metal, leaving the rest of the world starved of supply.

So far, that measure has failed to materialise, and on Monday LME warehouses received their biggest deliveries of the metal in almost four weeks. Three-month futures flipped to a premium of US$86.75 a tonne to copper for immediate delivery, a market structure known as contango that signals ample supply.

On Tuesday, economic data from China showed industrial output in the world’s biggest metals consumer improved more than expected in August, even as consumer spending and investment languished. The divergence widens a divide within the economy that complicates the decision facing policymakers over whether to provide additional stimulus.

Also in focus is the Federal Reserve’s upcoming meeting, where the central bank is expected to raise interest rates. That’s typically a negative for non-yielding assets like commodities.

Copper edged up 0.1% to trade at US$14,014.50 a tonne on the LME at 11.28am local time (6.28pm in Malaysia). Other metals were similarly little changed, with aluminium flat and zinc down 0.6%.

Singapore iron ore futures were stable at US$95.55 a tonne.

Source: theedgemalaysia