Copper Prices Plummet Amid Rising Inventories and Stronger Dollar

Copper prices dropped to their lowest levels in over three weeks on Tuesday as inventories at the London Metal Exchange (LME) continued to rise. The increase in copper supplies, combined with concerns over economic growth due to higher oil prices and a stronger US dollar, contributed to the decline.

Benchmark copper on the LME rose 0.1% to $14,021 per metric ton by 10:06 GMT, but earlier fell to $13,926, its lowest level since August 20. Copper inventories in LME-registered warehouses have increased by around 20% since mid-August to 242,900 metric tons.

Traders expect more copper that was previously sold at higher prices to arrive at LME warehouses in the coming days, but deliveries are likely to fall rapidly after premiums shifted to discounts last week. Analysts point to the prospect of tariffs on US copper imports as a potential disruptor to markets, citing concerns over oil supplies and prices.

The stronger US currency has also put pressure on industrial metals, with aluminum falling 0.1% to $3,240 a ton, zinc dropping 0.7% to $3,766, and lead declining 0.3% to $1,876. Tin was little changed at $51,850, while nickel fell 0.9% to $16,190.