METALS-Copper, other metals drop as investors shed risk after Israel strikes Iran

By Eric Onstad

LONDON, June 13 (Reuters) - Prices of copper and other industrial metals fell on Friday, weighed down by a stronger dollar as investors sold risky assets after Israel attacked Iran.

Benchmark three-month copper CMCU3 on the London Metal Exchange shed 0.5% to $9,653 a metric ton by 1600 GMT after touching $9,532, the weakest since June 3.

The dollar index .DXY climbed and world stock markets tumbled after Israel launched a large-scale military strike on Iran. MKTS/GLOB

A firmer dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.

"The market is de-risking on copper and aluminium," said Alastair Munro, senior base metals strategist at broker Marex.

"Current events remove the likelihood of our running away to the topside. The declines, of course, are set to please those looking for dips to buy."

LME copper had rebounded by about a fifth from April 7, when it touched the weakest since November 2023, until earlier this week.

U.S. Comex copper futures HGc3 dropped 0.3% to $4.82 a pound, bringing the premium of Comex over LME copper to $976 a ton.

Munro said much of the selling was by Commodity Trade Advisor (CTA) investment funds, which are largely driven by computer programs, while Chinese participants emerged at the lows to do some buying.

In China, the most-traded aluminium contract on the Shanghai Futures Exchange (SHFE) <SAFcv1> gained for the third straight day, up 0.4% at 20,425 yuan per metric ton, outperforming other SHFE metals.

"Aluminium, compared with the other metals, has been performing rather strongly recently as demand from the domestic market has been robust, while SHFE stocks have been declining," a Hangzhou-based analyst from a futures company said.

Aluminium stocks AL-STX-SGH in SHFE warehouses fell to 110,001 tons in the week ended June 13, the lowest since February 2024, having tumbled by 54% since late March.

Among other metals, LME aluminium CMAL3 gave up 0.5% to $2,505 a ton, lead CMPB3 slipped 0.3% to $1,990 and zinc CMZN3 fell 0.6% to $2,627 after earlier sliding to its weakest since May 1 at $2,582.

Nickel CMNI3 added 0.3% to $15,185 and tin CMSN3 rose 0.3% to $32,755.

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($1 = 7.1813 Chinese yuan)

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