METALS-Copper drifts lower, focus on possible restart of Iran-US talks

By Eric Onstad

LONDON, April 24 (Reuters) - Copper prices edged down on Friday on worries about the continued closure of the Strait of Hormuz, though losses were limited on news that peace talks between the U.S. and Iran could resume over the weekend.

Benchmark three-month copper CMCU3 on the London Metal Exchange was 0.3% lower at $13,313 a metric ton by 1600 GMT.

Copper pared losses after falling as much as 1.1% earlier in the session after news that Iran's foreign minister was expected in the Pakistani capital Islamabad on Friday to discuss proposals for restarting peace talks with the United States. President Donald Trump had said on Thursday he was in no rush to reach a peace agreement with Iran.

"While the risk of escalation through military conflict is reduced for now, the severity of the disruption continues to grow every day," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

LME copper, which hit a record high of $14,527.50 a ton on January 29, is caught between competing drivers: the threat of weaker economic activity pressuring demand against the threat of mine disruptions from shortages of sulphuric acid.

Key resistance on the upside is at $13,525 a ton, which has seen repeated challenges turned back since early February, Hansen added.

"With all these unknowns right now, that's probably why we've been more or less trading sideways for the last two weeks," he said.

Also pressuring copper was news that the International Copper Study Group said on Thursday the global refined copper market was expected to flip into surplus in 2026.

The most-active copper contract SCFcv1 on the Shanghai Futures Exchange sank 0.7% to 102,460 yuan ($14,988.52) a ton.

Helping support the metal was a continued decline in SHFE inventories CU-STX-SGH, which fell 16.3% over the past week and have more than halved since early March.

LME nickel CMNI3 advanced 1.8% to $19,075, its highest since January 29, on worries about supply.

The International Nickel Study Group this week said the market was expected to swing to its first annual deficit since 2021.

Elsewhere on the LME, aluminium CMAL3 dropped 0.9% to $3,586 a ton, zinc CMZN3 rose 0.5% to $3,470, lead CMPB3 gained 0.5% to $1,964 and tin CMSN3 added 0.2% to $50,325.

($1 = 6.8359 Chinese yuan renminbi)