METALS-Copper hits record high on tighter supply and weaker dollar

By Polina Devitt

LONDON, Dec 3 (Reuters) - Copper prices were sent to a record high on Wednesday by a weaker dollar, supply concerns and tighter availability of metal in warehouses registered with the London Metal Exchange.

Benchmark LME three-month copper CMCU3 was up 2.9% at $11,465 a metric ton by 1700 GMT after touching a record high of $11,540.

"Copper is looking quite bullish after breaking to new highs. There's a decent chance prices could climb toward $12,000 a ton from here," said Dan Smith, managing director of Commodity Market Analytics.

Heading for its largest yearly gains since 2017, copper is up 31% so far this year.

Adding to the bullish sentiment, the LME data showed net fresh cancellations of 50,725 tons in warehouses in Asia on Tuesday, bringing the available, or on-warrant, LME copper stocks to their lowest since July at 105,275 tons. 0#MCUSTX-LOC

This caught the market off-guard after price falls on Tuesday. The news added to various supportive factors including concern over tight supply outside the U.S. as Glencore lowered its 2026 copper production guidance.

The LME cash copper premium over the three-month contract was last at $86 a ton on Wednesday, its highest since mid-October, indicating tightness in near-term supply.

The Comex copper premium over the LME benchmark 0#LMECMXCU: is attracting inflows into Comex copper stocks HG-STX-COMEX that are already at a record high.

"The market has to come to terms that a premium for (copper) cathode has to be paid to incentivise supplies away from the U.S.," said Anant Jatia at Greenland Investment Management, a hedge fund specialising in commodity arbitrage trading.

"As cathode tariff risk is not going away any time soon, the market is only going to tighten further from here."

Tin CMSN3 climbed 4.2% to $40,675 a ton after hitting its highest since May 2022 at $40,895.

Aluminium CMAL3 rose 1.1% to $2,897 a ton, zinc CMZN3 was steady at $3,063, lead CMPB3 edged up 0.1% to $1,997.50 and nickel CMNI3 advanced 0.6% to $14,895.