Copper prices declined as stockpiles on the London Metal Exchange (LME) climbed to their highest level in more than six years, reflecting weakening demand for physical metal at elevated price levels.
The benchmark industrial metal slipped 0.6% to settle at $12,775 per metric ton. LME inventories rose sharply by nearly 19,000 tons to 330,375 tons, marking the highest level since September 2019.
The steady buildup in exchange inventories since the beginning of the year highlights a softening tone in the physical copper market. Demand in China has slowed, leaving sellers struggling to move cargoes, while earlier strong shipments to the United States ahead of potential tariffs have also tapered off. Although copper prices surged to a record above $14,500 in late January and remain roughly 30% higher year-on-year, elevated levels are now discouraging buyers.
In contrast, aluminum prices edged higher after two consecutive sessions of losses, supported by ongoing uncertainty surrounding the Iran conflict and its potential impact on regional supply.
Disruptions tied to the near closure of the Strait of Hormuz are limiting the movement of raw materials and finished metal, forcing several smelters to scale back output. Analysts warn that further production cuts are likely if the situation persists.
According to Chinese research firm Mysteel, regional producers could reduce annualized aluminum output by as much as 500,000 tons if the strait remains blocked for another one to two weeks. The firm noted that current aluminum prices do not fully reflect the combined impact of supply disruptions and rising production costs, adding that earlier expectations of a swift resolution to the conflict now appear unrealistic.
Meanwhile, a technical outage on Monday temporarily halted electronic trading across all LME contracts for more than two hours, preventing market participants from placing orders in metals ranging from aluminum to zinc.
Across the broader base metals complex, performance was mixed, with aluminum posting a modest 0.1% gain while nickel declined 1.5%.
