METALS-Copper hits one-week low as Middle East escalation clouds growth outlook

- Copper prices fell to a one-week low on Thursday, as renewed tensions in the Middle East pushed the dollar and oil prices higher, fuelling inflation and slowdown concerns.

Three-month copper on the London Metal Exchange CMCU3 was down 0.1% at $13,514.50 a metric ton, as of 0300 GMT, after falling to its lowest level since May 21 earlier in the session.

The most-traded copper contract SCFcv1 on the Shanghai Futures Exchange was down 1.1% at 103,830 yuan ($15,316.31) a ton, its lowest level since May 20.

The U.S. military carried out new strikes targeting an Iranian drone operation that posed a threat to U.S. forces and commercial shipping in the Strait of Hormuz, a U.S. official said, hours after President Donald Trump dismissed an Iranian report of a deal to restore traffic through the strategic waterway.

The U.S. dollar index .DXY climbed to a near one-week high, making greenback-priced commodities expensive for other currency holders. USD/

"Dollar at highs and an impasse in Hormuz that saw U.S. attacks isn't helping sentiment," independent metals trader Tai Wong said, adding that he expects base metal prices to "continue to trade sideways pending a durable Hormuz outcome."

Crude oil prices also rose following the U.S. military action. Higher energy prices have dimmed the outlook for metals due to the risk that an energy shock could squeeze global growth and manufacturing.

Meanwhile, depletion of available copper stocks in LME-registered warehouses MCUSTX-TOTAL continued, while COMEX copper stocks HG-STX-COMEX saw further inflows.

Three-month aluminium on the London Metal Exchange CMAL3 fell 0.5% to $3,619 a metric ton, its lowest level since May 21.

Pressuring prices, the September alumina futures on the Shanghai Futures Exchange SAOU6 fell 0.4%, after hitting a one-month high in the previous session.

Elsewhere on the LME, zinc CMZN3 fell 0.2%, lead CMPB3 was down 0.4%, nickel CMNI3 lost 0.8% and tin CMSN3 edged 0.1% lower. Zinc was at an over two-week low, while lead hit one-week low.

Among other SHFE metals, aluminium SAFcv1 fell 1.1%, zinc SZNcv1 was down 0.7%, lead SPBcv1 lost 1%, nickel SNIcv1 fell 1.1% and tin SSNcv1 lost 1.1%.


($1 = 6.7820 Chinese yuan)