Copper falls as inventories rise to 11-month high

Copper prices fell on Tuesday as rising inventories in London Metal Exchange-registered warehouses pressured the market, although thin trading volumes amid the Chinese Lunar New Year holiday limited activity. Benchmark three-month copper on the London Metal Exchange was down 0.8% at $12,744 a metric ton by 0959 GMT. The metal, used in power and construction, is down 12% since it hit a record high of $14,527.5 on January 29 on a wave of speculative buying, encouraged by expectations of strong demand. The record-high prices muted demand in top metals consumer China and added to the 2025 stockpiling in the United States, driving combined copper stocks of the three exchanges - the LME, the Shanghai Futures Exchange, and U.S. Comex exchange - to more than one million tons for the first time in more than two decades. Copper inventories in the LME system reached an 11-month high of 221,625 tons after 9,975 tons were delivered to LME-registered warehouses in the U.S., South Korea and Taiwan, daily LME data showed. The discount on the LME cash copper contract to the three-month contract widened to $114 a ton on Monday, its highest level in one year, indicating ample nearby supply. This marks a sharp reversal from a premium of $102 on January 20. Meanwhile, trading liquidity has been thin this week due to the Lunar New Year holiday in top metals consumer China that began on February 15. The SHFE is closed until February 24. During the holiday period, copper has traded in a narrow technical range, with price sandwiched between the 21-day and 50-day moving averages, currently at $13,029 and $12,621, respectively. On the supply side, mining giant BHP Group flagged an $18 billion multi-year investment plan to develop copper, gold, and silver mining projects in Argentina. Chilean miner Antofagasta said its increased capital spending would boost production in the medium term. In other metals, aluminium and tin rose 0.4% to $3,064.50 a ton and $45,985, respectively. Zinc fell 0.1% to $3,286, lead lost 0.3% to $1,952, and nickel slid 1.0% to $16,935.