Copper prices edged higher on Tuesday on supply worries and continued interest from speculators, countered by a slightly firmer dollar and uncertainty over U.S. interest rates.

Benchmark three-month copper HG1! on the London Metal Exchange rose 0.2% to $13,235 a metric ton in official open-outcry trading, recovering from an intraday low of $13,033 in Asian trading.

LME copper has surged 45% over the past 12 months, hitting successive record highs, including $13,387.50 last week.

“There’s loads of liquidity around and a lot of people are trying to get away from the U.S. and find safe havens outside that in terms of financial markets,” said Dan Smith, managing director at Commodity Market Analytics.

$14,000 BARRIER IN SIGHT

There is a good chance LME copper will break through the $14,000 barrier in the near future, he added.

Copper’s rally has been fuelled by disruptions at mines, worries about deficits this year and a flow of copper to the U.S. ahead of potential tariffs that are tightening supply elsewhere.

The tightness is showing in available LME copper inventories, which fell 22% to the lowest level in six months, LME data showed on Tuesday.

It is also appearing in the rising premium on LME cash copper over the three-month contract (CMCU0-3). The premium rose to $64 a ton on Tuesday for its highest in a month and up from $3 a week ago.

Some traders were on the sidelines, however, ahead of U.S. consumer price index data on Tuesday.

After softer jobs data, Goldman Sachs pushed back its forecasts for the U.S. Federal Reserve to cut interest rates in 2026.

“Hopes of any near-term rate cuts have been dashed, pulling the trigger for a pullback in prices,” said one Beijing-based trader.

The most traded copper contract on the Shanghai Futures Exchange HG1! closed daytime trade 0.5% down at 102,290 yuan ($14,662.71) a ton.

Among other metals, LME aluminium ALI1! shed 0.1% to $3,183 a ton, nickel NICKEL1! dropped 0.5% to $17,800 and tin FTIN1! was down 0.1% at $47,925 after hitting its highest since March 2022 at $49,380.

Zinc ZNC1! climbed 1.2% to $3,255 a ton after touching its strongest since October last year at $3,274 while lead LEAD1! added 0.4% to $2,060.50.
Source: Reuters