LONDON: Copper prices dipped on Tuesday, pressured by a stronger dollar, potential US tariffs and uncertainty surrounding talks to end the war in Ukraine.
Three-month copper on the London Metal Exchange (LME) was little changed at $9,398 a metric ton by 1525 GMT. The contract hit its highest in three months on Friday at $9,684.50.
US Comex copper futures dropped 2.2% to $4.56 a lb.
“The dominant theme at the moment is Trump policy,” said Tom Price, head of commodities strategy at Panmure Liberum.
US and Russian officials met on Tuesday in Riyadh for their first talks on ending the war in Ukraine.
“War ending in Ukraine is really an energy story for Russia rather than a metal story. The metal flow out of Russia has never been fully shut down,” Price said.
Peace could result in normalising energy flows from Russia, which would be bearish, but it also could means the prospect of recovery and sustained growth in aggregate demand globally, with the net result neutral to bullish, Price added.
Higher energy prices could lift other commodities since it is a key input, he said.
LME copper inventories extended gains in data released on Tuesday, rising to 263,775 tons for an 11% increase since last Wednesday.
Also weighing on the market was a stronger dollar, making dollar-priced commodities more expensive for buyers using other currencies.
Copper has also been pressured by lack of clarity on potential US tariffs on metals as investors seek to calculate how much duties will inflate prices on the US Comex exchange.
The premium for US Comex copper over the LME price fell to $750 a ton on Tuesday, from $995 a day earlier.
In other metals, LME aluminium added 0.2% to $2,649 a ton, zinc firmed by 0.5% to $2,887 and tin climbed 0.4% to a four-month peak of $32,805.
Nickel shed 0.6% to $15,400 a ton and lead dipped 0.1% to $1,989.
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