Copper drifts lower on profit taking, economic uncertainty

Copper and aluminium prices edged lower on Friday as investors locked in profits from a rally amid uncertainty about the global economy and unresolved conflict in the Middle East. Benchmark three-month copper on the London Metal Exchange slipped 0.1% to $14,133 a metric ton in official open-outcry trading. LME copper has gained 9% since touching a seven-week low on June 24 on declining inventories and tight supply outside the United States. "We're seeing some profit-taking after a strong run-up, but that uptrend looks fairly solid. The long-term drivers are not going to go away anytime soon and will continue to underpin prices," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. Copper prices would have to break below $13,700 to damage the uptrend, he added. "The market wants to trade from the assumption that a solution will be found in the Middle East, but it could flare up at any time." Oil prices rose on Friday after the United States threatened an indefinite naval blockade of Iran. LME copper inventories extended their decline on Friday to 204,975 tons, down 48% since late May, while the cash contract's premium over three-month futures surged to $256.50 a ton, its strongest since June 2025. The most-traded copper contract on the Shanghai Futures Exchange edged 0.1% lower to 107,690 yuan ($15,970.64) a ton. "Demand for base metals may appear resilient, but we still think it is questionable if it can sustain the same strong momentum given how quickly asset prices have accelerated while wage growth is somewhat subdued," Fastmarkets analyst Andy Farida said. LME aluminium fell 0.4% in official activity to $3,244 a ton and was set to end the week down 1.2%. Supply recovery prospects from the Middle East have relieved some expected tightness, while alumina production at Norsk Hydro's Alunorte refinery in Brazil started scaling back up on Thursday. LME zinc gained 0.3% to $3,763 a ton, lead added 0.1% to $1,888, nickel was little changed at $16,780 and tin gained 0.6% to $56,195.