On Thursday, March 20, London Metal Exchange (LME) copper futures hit a five-month high, breaking through the key psychological level of $10,000 per mt, before pulling back due to a stronger US dollar and producer selling pressure.
At 17:00 London time (01:00 Beijing time on March 21), three-month copper closed down by $51, or 0.51%, at $9,936.5 per mt, after earlier touching a high of $10,046.5, the highest since October 3.
Supporting London prices was the continued rise in US COMEX May copper, which had earlier reached a 10-month high of $5.1485.
A US warehouse operator said that due to the high premium between COMEX and LME copper, along with tariff impacts, a large amount of copper is now being shipped to the US.
Since the beginning of the year, COMEX copper has risen 27%, while LME copper prices have only increased 14% over the same period.
The latest COMEX/LME copper premium stood at $1,344 per mt.
Analysts from ING stated in a report that they expect the surge in US imports to tighten supply in other regions.
Morgan Stanley noted in a report that the large volume of copper being shipped to the US would lead to tighter supply in markets outside the US.
Since mid-February, US COMEX copper inventories have decreased by 7.5% to 93,154 mt, while LME copper inventories have been continuously declining, reaching 223,275 mt as of Thursday, the lowest level since mid-July.
The US dollar strengthened on Thursday as the US Fed indicated on Wednesday that it was not in a hurry to cut interest rates, given uncertainties surrounding US tariffs. A stronger dollar typically makes commodities priced in dollars more expensive for investors holding other currencies.
