Copper vaulted above the $14,000 mark to a two-month peak on Tuesday, driven higher by dwindling inventories outside the U.S. and hopes for a resolution of the Iran war, even as the status of negotiations was unclear.
Benchmark three-month copper on the London Metal Exchange was up 1.4% at $14,065 per metric ton in official open outcry activity. It rose above $14,000 shortly after the release of LME stocks data at 0800 GMT and hit a session high of $14,115, the most since June 2.
The stocks data showed orders to withdraw another 7,225 tons of copper from LME warehouses , leaving available inventory at just 94,200 tons, little more than a day's worth of global consumption.
That helped push the backwardation in the cash to three-month spread up to as much as $105 a ton, the steepest premium since January and a sign of growing tightness.
The copper withdrawals, or cancelled warrants, were mostly from the U.S. storage hub of New Orleans, where metal can fetch a premium by being moved to the COMEX exchange. COMEX holds more than double LME and Shanghai Futures Exchange copper stocks combined at 650,736 metric tons.
Meanwhile, conflicting signals from the United States and Iran over talks to end their five-month-old war fed uncertainty, with the latest attack on shipping in the Strait of Hormuz highlighting risks to flows of aluminium as well as energy.
The lightweight metal added 0.5% to $3,236 a ton, touching its highest since June 23.
"Aluminium has reclaimed the $3,200/t area, but we do not expect prices to hold comfortably at these levels without a renewed Middle East shock or another clear supply-risk catalyst," analysts at Sucden Financial wrote in a note.
Nickel rebounded by 1.4% to $17,300 after losing ground on Monday, with traders awaiting clearer guidance on new nickel mining quotas in Indonesia.
Zinc rose 0.9% to $3,672, after striking a nearly four-year high on Monday, while lead gained 1.3% to $1,890 and tin rose 0.8% to $55,900, also notching a two-month top.
