Copper prices dipped on Wednesday as a jump in warehouse stocks at the London Metal Exchange pushed supply fears that have supported prices into the background. Benchmark three-month copper on the LME was down 0.32% at $13,942 a metric ton by 0700 GMT. The most-traded copper contract on the Shanghai Futures Exchange fell 1.05% to 106,850 yuan ($15,857.82) a ton.
Copper was "tripped up" after a surprising increase in inventories on the LME, Marex consultant Ed Meir wrote in a note.
Data from the LME on Tuesday and Monday showed total copper stocks on the exchange rose by nearly 20,000 tons, as big shipments were delivered into warehouses. Copper stocks in LME and SHFE warehouses had fallen since May as traders positioned material ahead of a potential U.S. tariff on refined copper. Total LME stocks remain 44% lower than at the start of May despite the latest increase. Elsewhere, markets were watching the Middle East war. There were no reports of fresh strikes between the U.S. and Iran on Tuesday after a temporary ceasefire agreement expired with no longer-term peace agreement on Monday. The war has buffeted industrial metals and the global economy by pushing up oil prices and raising interest rate bets, and has disrupted the supply of aluminium from big producers in the region.
Crude oil was firm on Wednesday, but below its wartime peak, and interest rate traders shrugged off inflationary concerns from the impasse, with rate hike expectations little changed, according to the CME's FedWatch tool. Aluminium was mixed on Wednesday, rising 0.08% on the LME and falling 1.07% on the SHFE. Wartime price support has faded on expectations of production restarts in the Middle East, and suppliers have turned to alternative shipping routes to avoid disruption.
Among LME metals, zinc dipped 0.11%, lead dipped 0.16%, nickel ticked 0.11% higher and tin dipped 0.19%.
Among SHFE metals, zinc lost 1.46%, lead added 0.31%, nickel lost 0.36% and tin lost 1.21%.
