Copper prices slipped on Thursday as U.S.-China trade tensions and the uncertainty created by the United States government shutdown weighed on sentiment, while the softer dollar provided some support.

Benchmark copper HG1! on the London Metal Exchange was down 1.1% at $10,528 a metric ton in official open-outcry trading. Worries about tight supplies due to mining disruptions propelled prices to a 16-month high of $11,000 a ton last week.

The two-week-old U.S. federal government shutdown may cost the economy as much as $15 billion a week in lost output, a Treasury official said late on Wednesday, which has been weighing on the dollar.

Metal traders said worries about manufacturing growth and demand, particularly in top consumer China, had resurfaced and some companies with bets on higher copper prices were cutting their positions.

Expectations of poor demand prospects in China with its heavy reliance on manufacturing and exports are likely to be reinforced by GDP data for the third-quarter forecast at a lower rate than in the second quarter.

Analysts at Goldman Sachs expect the market to remain in surplus “for the time being”, adding that they expect Chinese buyers to stay away if prices exceed $11,000.

“Current high prices for copper … reflect bullish investor sentiment for 2026, fuelled by U.S. Fed (Federal Reserve) rate cuts, expectations of a weaker dollar and AI-related capex,” they said in a recent note.

Some analysts are expecting copper demand from data centres and grid infrastructure investment to increase substantially over the next few years.

Elsewhere, focus is on aluminium where one company is holding large amounts of warrants – title documents conferring ownership of metal stored in LME-registered warehouses (0#LME-WHL). Attention is also on large holdings of cash contracts and forwards (0#LME-WHC), (0#LME-FBR).

Concerns about a tight LME aluminium market have created a premium for the cash contract over the three-month forward (CMAL0-3), which, this week, climbed above $21 a ton to its highest since February. It was last trading around $6.

Three-month aluminium ALI1! gained 0.3% to $2,755 a ton in official activity, zinc ZNC1! added 0.2% to stand at $2,953, lead LEAD1! eased 0.1% to $1,980, tin FTIN1! was steady at $35,400 while nickel NICKEL1! slipped 0.3% to $15,150.
Source: Reuters