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Copper reaches two-month high due to supply concerns and declining LME stock

Copper prices reached their highest in two months Thursday. Speculators were boosted after copper surpassed technical levels, as inventories in London Metal Exchange stores decreased and amid concerns about supply after a large mine in Congo had been suspended.

The London Metal Exchange's three-month copper rose 1.52%, to $9,761 per ton, at 1025 GMT. This is the highest since April 1.

Traders said that copper gained momentum after it decisively broke through technical levels to the upside. This prompted some automatic purchase orders.

Overall, copper is in a very good position at the moment. "You still have this build-up of Comex stocks, so there is a squeeze on LME," said Dan Smith.

The U.S. investigation on potential new copper import tariffs has been re-focused by President Donald Trump’s decision to double the tariffs on aluminum and steel from 25% to 50%.

This has increased the flow of copper into the United States. It includes inventories from the London Metal Exchange, as traders try to profit from the higher prices in anticipation of U.S. Tariffs on the metal.

U.S. Comex Copper Futures climbed 2.5%, to $5.01 a lb. This increased the premium over LME Copper to $1,321 a tonne.

LME copper inventories fell to 138,000 tonnes, the lowest in almost a year. They are down nearly half this year. Comex inventories have risen by 90% in the last two months .

LME data showed on Thursday that copper inventories were also expected to continue dropping as holders of 11,625 tonnes of inventory notified the LME of their pending removals.

Smith also added that the suspension of Kakula Copper Mine in Democratic Republic of Congo is also a concern.

Ivanhoe Mines, a co-owner of the mine, announced on Monday that it would restart a portion of the mine in late this month.

LME tin increased 0.4% to $22,145 per ton, after reaching a record high one week earlier on Wednesday. This was due to concerns that a resumption in supply from Myanmar's rich tin-rich Wa State might take longer than expected.

Other London metals include LME aluminium, which rose 0.2% to $2.489 per ton, and LME nickel, up 0.8% to $15.520. Zinc was unchanged at $2.701 while lead fell 0.3% to $1.984.

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(source: Reuters)