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Copper prices increase as US-Iran lull calms fears of oil and economic growth

Copper prices increase as US-Iran lull calms fears of oil and economic growth
Copper prices increase as US-Iran lull calms fears of oil and economic growth

Prices of copper rose on Monday as oil prices dropped after the U.S. & Iran suspended their 'hostilities', alleviating concerns over price pressures and global growth.

Benchmark 'copper' on the London Metal Exchange rose 0.32% to $13,688.5 per metric ton by 0700 GMT. The Pentagon suspended its campaign against Iran on Friday after 13 nights of increasing airstrikes by the United States. Iran has been holding a 'fire' for two days after it had responded to each night’s U.S. airstrikes with its own attacks on countries in the region that house U.S. bases. The oil prices fell as the ceasefire in fighting raised the hopes of a diplomatic solution allowing shipping in the Strait of Hormuz to resume.

Tom Price, Panmure Liberum analyst, said that the market was waiting for a resolution. It is pricing peace instead of a war. "Chile was hit by unusually severe storms that put pressure on the electricity distribution grid, and raised questions about the copper production guidelines across the industry," said Panmure Liberum analyst Tom Price.

The market is also focusing on the copper stocks stored in LME approved warehouses. With 272,975 tonnes Stocks are down 30% since May's end.

Since February of last year, producers and traders have been importing copper into the United States. This is because President Donald Trump had threatened to impose import tariffs. The result was a premium in U.S. Copper over LME Prices.

The U.S. Commerce Department was supposed to finish a review on the copper market before June 30, but Trump has yet to announce a decision regarding tariffs.

Other metals saw a 0.6% increase in aluminum to $17.385, a 0.8% rise in zinc to $3.621, a 0.3% rise in lead to $1.839, and a 1.3% jump for tin to $54,500. Nickel was unchanged at $17.385.

(source: Reuters)