Copper slips as macro concerns outweigh US tariff fears

Copper edged lower on Wednesday, as volatility in the Middle East conflict and macroeconomic concerns overcame price support from potential U.S. tariffs. Benchmark three-month copper on the London Metal Exchange declined 0.32% to $13,572 a metric ton as of 0700 GMT. The most-traded copper contract on the Shanghai Futures Exchange was down 0.29% to 104,110 yuan ($15,366.79) a ton. Oil reversed earlier gains, declining 0.1%, even after the U.S. and Iran traded some of the biggest strikes since the two countries agreed to a ceasefire in April. The war has pushed energy prices up and strained manufacturing, a key sector for copper demand. In China, producer prices rose for a third straight month in May, to the highest level since 2022, official data released on Wednesday showed, driven by rising commodity prices and improved demand in certain industries. Looking ahead, U.S. inflation data for May are set to be released later on Wednesday, which could inform the Federal Reserve's policy decision. Better-than-expected U.S. jobs data last Friday boosted the dollar and raised the likelihood of a rate hike this year, rattling the copper market. Higher interest rates generally dampen the demand prospects for growth-dependent industrial metals. A decision on U.S. copper tariffs, expected in the second half of the year, continued to provide support to prices. The U.S. has floated a possible 15% levy on copper imports from the start of 2027, followed by 30% from 2028. Among other LME metals, aluminium lost 1.03%, zinc lost 0.7%, lead lost 0.58%, nickel lost 0.58% and tin lost 0.98%. Elsewhere on SHFE, aluminium lost 0.64%, zinc dipped 0.3%, lead dipped 0.19%, nickel dropped 1.72% and tin lost 0.92%.