Copper slips on doubts about US-Iran ceasefire

Copper prices slipped on Thursday as doubts about whether the U.S.-Iran ceasefire would hold reinforced concerns about global growth and demand for industrial metals, traders said. Benchmark copper on the London Metal Exchange traded 1.2% lower at $12,551 a metric ton in official rings. Prices of the metal used in power and construction hit a three-week high at $12,755.50 on Wednesday after news of the two-week ceasefire agreement in the Middle East sparked optimism that shipments through the Strait of Hormuz might soon resume. Elevated oil prices are also expected to dampen growth by fuelling inflation and squeezing spending. Also weighing on copper are stocks in warehouses registered with the LME and Comex above 900,000 tons, double the level since the start of the year. "On paper, global copper inventories, including U.S. stocks, appeared elevated," Morgan Stanley analysts said in a note. "In practice, however, U.S.-held metal is unlikely to be re-exported, even if tariffs are ultimately not implemented. In our view, that has made those inventories behave more like a strategic reserve." Climbing inventories have created a large discount for the cash contracts over the three-month forward on the LME. Elsewhere, disrupted shipments of aluminium from the Middle East are behind the premium for the LME cash contract over the three-month forward . Last week this premium climbed above $70 a ton, the highest since 2007. The Middle East produced nearly seven million metric tons of primary aluminium last year or 9% of global supply estimated at around 75 million tons this year. Three-month aluminium was flat at $3,455, zinc eased 0.3% to $3,283, lead fell 0.8% to $1,925, tin retreated 1.9% to $46,700 and nickel ceded 0.6% to $17,200.