Copper Prices Soar on Inventory Crunch and Middle East Tensions

Copper prices surged to a two-month high on Tuesday, crossing above $14,000 per metric ton. The increase was driven by dwindling inventories outside of the US and hopes for a resolution in the Iran war, although negotiations remained unclear.

Data from the London Metal Exchange showed that available inventory stood at just 94,200 tons, little more than a day's worth of global consumption. This led to a steep premium in the cash-to-three-month spread, reaching $105 per ton, its highest since January.

The data also revealed significant withdrawals from LME warehouses, mostly from the US storage hub of New Orleans. COMEX holds over double the combined inventories of LME and Shanghai Futures Exchange copper at 650,736 metric tons.

Others metals like aluminium and zinc also saw gains, with aluminium reaching its highest since June 23 and zinc edging up to a nearly four-year high. Nickel rebounded after losing ground on Monday, awaiting clearer guidance on new nickel mining quotas in Indonesia.