Copper rally holds firm even as rising oil threatens growth outlook

Copper hovered near record levels on Thursday, with scarce deliverable metal in markets outside the United States continuing to underpin prices, while oil breached $100-a-barrel and investors awaited US inflation data. Benchmark three-month copper on the London Metal Exchange slipped 0. 07% to $14, 757 a metric ton as of 0330 GMT, after reaching a record $14, 858. 50 on Wednesday. The most-traded copper contract on the Shanghai Futures Exchange rose 0. 49% to 111, 660 yuan ($16, 646. 54) a ton. Most other LME base metals traded lower amid higher oil prices as the widening conflict in the Middle East added to inflation concerns and pushed global bond yields higher. Tighter financial conditions could weigh on economic growth and demand for industrial metals. Large stockpiles remain concentrated in the US after months of inflows ahead of potential tariffs, while readily available metal in other markets remains tight. COMEX copper inventories edged up to 767, 495 short tons, or 696, 260 tons as of Wednesday. However, LME cash copper premium against three-month has dwindled to as low as $23. 50 a ton from $545 reached in mid-August, implying some inflow into LME warehouses helped relieve near-term tightness. Investors were also awaiting US consumer inflation data due on Friday. Markets were pricing in around a 60% chance of a Federal Reserve rate increase this month, according to the CME FedWatch Tool, higher since the release of robust US jobs data last week. Among other LME metals, aluminium fell 0. 33%, zinc dropped 0. 75%, lead lost 0. 21% and nickel edged down 0. 04%, while tin gained 0. 84%. On the SHFE, aluminium fell 0. 12%, zinc rose 0. 09%, lead slipped 0. 12%, nickel gained 0. 84% and tin jumped 1. 77%.

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