Base metal prices on the London Metal Exchange (LME) mostly edged up in official trading today, as support from a weaker US dollar was capped by worries over the Iran-Israel conflict, US tariffs uncertainty and weak Chinese demand.
The US dollar index, which measures the currency against a basket of six others, fell to 98.65 following the official session today from 98.96 at the same time on Thursday. The drop was attributed to US President Donald Trump's two-week window over which he will decide whether to take direct action against Iran, with the prospect of US escalation prompting markets to pause investing in the dollar.
While the weaker dollar fueled a rally across the industrial metals complex, further fighting between Iran and Israel today caused metals to shed their gains to end the official session little-changed relative to Thursday.
Alongside the war, lingering worries over US tariffs continued to depress liquidity as markets weighed demand-side fallout and possible supply-chain bottlenecks.
Weak physical metals demand in top consumer China was also in focus to drive sluggish activity. Output of metals in China — including refined copper — remains robust, but the country is in the middle of a summer slowdown, which is slowing consumption.
Benchmark copper rose by 0.5pc to $9,654/metric tonne (t), while in the US, the copper contract for the next active month — July — on the Chicago Mercantile Exchange (CME) slipped by 0.4pc to $4.83/lb from Wednesday after the CME was closed yesterday for the Juneteenth holiday.
Three-month LME aluminum rose by 0.1pc, or just $2.50/t, to $2,529.50/t.
Three-month LME zinc edged up by 0.5pc to $2,644/t, while three-month LME tin was the biggest mover of the day, rising by 0.7pc to $32,475/t.
The global zinc market was in a supply surplus of 151,000t during January-April, preliminary data from the International Lead and Zinc Study Group (ILZSG) showed. Global mined zinc output totalled 3.94mn t in January-April, up by 5.1pc from the same period a year earlier, the ILZSG said.
Three-month LME lead rose by just $1/t today to $1,989/t, while three-month LME nickel was the benchmark outlier, falling by 0.7pc to $14,950/t. The $15,000/t level is considered key for the current nickel market, and traders surveyed by Argus this week said persistent weak demand is set to drive supply-side cuts in top nickel producer Indonesia in the coming weeks.
On-warrant nickel stocks rose to 190,314t, a multi-year high.
Markets will be watching events in Geneva where officials from the UK, France and Germany will hold diplomatic talks with officials from Iran in a bid to diffuse tensions in the Middle East.
The July forward contract for WTI, the US crude benchmark, edged lower by 21¢/bl to $74.93/bl.
