SINGAPORE: Copper prices in London softened on Monday, weighed down by a buildup in warehouse stocks that eased supply worries and on concerns about high energy prices.
Benchmark three-month copper on the London Metal Exchange was down 0.56% at $14,242.5 a metric ton by 0300 GMT.
The most-traded copper contract on the Shanghai Futures Exchange rose 0.55% to 108,720 yuan ($16,299.36) a ton, tracking Friday’s overnight LME gains.
Copper stocks in LME warehouses surged last week to their highest levels since July, after a batch of deposits into LME-registered warehouses, mostly located in North America.
Expectations of a potential tariff on imports of refined copper into the US have pulled the metal into the country, thinning stocks elsewhere and pushing the metal on the LME to a record high of $14,875 a ton on September 11.
Macro fears and expectations of a shift in the draw of metal into the US are contributing to a bearish backdrop on copper, Alastair Munro, senior metals strategist at Marex, said in a note.
Meanwhile, oil prices started the week lower, but remained at elevated levels after a spree of attacks on Saudi Arabia by Yemen’s Houthis raised geopolitical risks.
Higher energy costs dampen global economic sentiment and have weighed on demand expectations for growth-dependent copper, which is used in electrification, construction, and consumer goods.
Providing some support, the Yangshan copper premium, a gauge of China’s appetite for imported copper, was at $168 a ton on Friday, its highest since 2014.
In China, the world’s biggest copper consumer, some smelters are in maintenance, with stocks in SHFE-monitored warehouses falling more than a quarter to 54,356 tons last week.
Among LME metals, aluminium lost 0.41%, zinc dipped 0.09%, lead shed 0.18%, nickel lost 1.19% and tin declined 0.24%.
Among SHFE metals, aluminium gained 0.89%, zinc was up 0.93%, lead dipped 0.12%, nickel dropped 2.06% and tin rose 0.98%.