Copper retreats on slow progress of U.S.-Iran peace efforts

Copper prices eased on Thursday, weighed down by concern over slow progress by the U.S. and Iran in forging a peace deal and the risk of weaker metals demand from a prolonged conflict. Benchmark three-month copper on the London Metal Exchange lost 1.3% to $13,480 a metric ton in official open-outcry trading after climbing by 1.8% in the previous session. LME copper has gained 8% this year but has pulled back from the $14,196.50 touched last week for its highest in more than three months. "For now, geopolitics is setting the tone; but without a clear demand catalyst, copper is struggling to hold on to record-high momentum," said ING commodities strategist Ewa Manthey. Six weeks since a fragile ceasefire took effect, talks to end the war have made little progress, although Pakistan stepped up diplomatic efforts on Thursday. Investors are trying to balance the impact of potential supply tightness because of mine disruptions and shortages of sulphuric acid against the threat of eroding demand owing to higher inflation and weaker economic growth. "The base metals market remains wary of demand losses stemming from elevated energy prices and the conflict’s implications for global growth and inflation," said Standard Chartered analyst Sudakshina Unnikrishnan. LME aluminium added 0.7% to $3,648 a ton, helped by the buying of options by bullish investors betting on further disruptions in the Gulf. The region accounts for about 8% to 9% of global output. LME nickel shed 1% to $18,740 a ton as investors absorbed details of a new Indonesian policy to place exports of some nickel products under state control. Among other metals, zinc fell 0.6% to $3,533.50 a ton, lead nudged 0.5% higher to $1,990 and tin dropped 2% to $52,950.