Copper set for weekly gain as demand blunts macro headwinds

Copper looked set for a weekly gain despite a drop on Friday, as tightening supplies and bullish sentiment helped offset wider macroeconomic concerns tied to the Iran war and inflation. Benchmark three-month copper on the London Metal Exchange declined 1.34% to $13,745 a metric ton by 0700 GMT. It was however up 0.7% for the week. The most-active copper contract on the Shanghai Futures Exchange fell 0.46% to 105,150 yuan ($15,521.90) a ton. Copper has proven resilient to macroeconomic headwinds, with "structurally driven demand offsetting cyclical weakness," Daniel Hynes, a senior commodity strategist at ANZ, said in a note. ANZ said on Thursday it expects copper prices to rise towards $14,000 a ton by year-end, with demand growth from the energy transition and AI infrastructure accelerating in the medium term. There were large orders to withdraw copper from LME warehouses on Thursday, continuing the trend seen in recent months. LME copper inventories declined to 379,975 tons, their lowest since April 2, while COMEX copper stocks in the U.S. rose to 642,709 short tons (583,056 tons). "Non-U.S. (that is, LME, SHFE) copper exchange inventories have in fact been declining over the past few months," Hynes said. Investors also awaited a recommendation from the U.S. Department of Commerce on possible tariffs on imports of refined copper, due by the end of the month. In the Middle East, the Iran-backed Hezbollah militia rejected a ceasefire in Lebanon on Thursday, undermining optimism generated by Israel and Lebanon's reported agreement of the ceasefire earlier that day. Among other LME metals, aluminium fell 0.56%, zinc declined 0.81%, lead lost 0.45%, nickel dropped 0.9% and tin dropped 2.59%. On the SHFE, aluminium dipped 0.33%, zinc lost 0.88%, lead lost 0.42%, nickel dropped 1.64% and tin plunged 5.35%.