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Copper slips on US Iran ceasefire doubts, Strait of Hormuz Closure

Copper prices fell on Monday as the Strait of Hormuz was closed again to marine traffic. A fragile ceasefire between Iran & the United States looked in danger, reigniting fears over the economic growth.

In open-outcry official trading, the benchmark three-month 'copper' on the London Metal Exchange fell 0.8% to $13,235 per metric ton. Last week, the metal gained 3.9% on the optimism that the ceasefire would hold and Iran's announcement on Friday that commercial vessels could now enter the Strait.

The?U.S. The?U.S. then seized a cargo ship from Iran that was trying to blockade the strait on its own. Tehran promised to retaliate and refused to take part in further peace negotiations.

Dollar-denominated commodities became more expensive to holders of other currencies. This impacted prices.

LME Copper Stocks The, however, remains near a 12-year-high at nearly 400,000 tonnes.

The?China market, the world's largest metal consumer, has a resilient demand, which helped limit any?downside. Shanghai Futures Exchange stocks of copper On Friday, the number of tons fell by 9.8% compared to last week and is down nearly 45% from March 13.

Aluminium prices fell by 0.4% in other parts of the world to $3,552 per ton. This was a continuation of a 2.2% decline on Friday, when supply concerns were eased with the reopening of Strait of Hormuz. The International Aluminium Institute reported on Monday that primary aluminium production in the Gulf fell 6% in comparison to February.

In a recent note, broker Marex stated that "Positioning (and) risk are] so much reduced in the metals industry amid the conflict between production concerns versus recessionary threat and demand destruction."

Zinc fell 0.3%, to $3,436 per?ton. Lead also dropped 0.3%, to $1,957, and tin fell 0.7%, to $50,330. Nickel, the only base metal to rise, gained 0.3%, reaching $18,165, as fears of sulphuric-acid shortages hit local producers. They also warned about a new formula for pricing ore that would increase production costs. (Reporting and editing by Tasimzahid and David Goodman)

(source: Reuters)