Copper Prices Hit 3-Week Lows Amid Inventory Surge

Copper prices have hit their lowest levels in over three weeks, falling to $14,094 per metric ton on the London Metal Exchange (LME) on Tuesday. This decline comes amidst rising inventories at the LME, which have increased by nearly 20% since mid-August to 242,900 tons.

The surge in inventory is attributed to elevated premiums for nearby contracts against longer-dated forwards, making it less economical for traders to hold onto copper stocks. This trend may soon reverse as traders expect more copper sold at previous high prices to be delivered to LME warehouses over the coming days.

Copper prices across various maturities started to fall last week after sources revealed that US President Donald Trump had not yet made a decision on imposing tariffs on copper imports. This uncertainty pushed Comex copper prices above LME prices, causing traders to ship copper to the United States and driving Comex stocks to record highs.

Analysts warn that concerns about oil supplies due to escalating tensions in the Middle East will weigh on growth, manufacturing activity, and demand for metals. With oil prices hovering around $107 per barrel, up from near $87 at the end of August, copper prices are expected to remain under pressure.