METALS-Copper advances as investors buy in supply concerns despite high oil prices

May 13 (Reuters) - Copper advanced to a three-month high on Wednesday as investors continued to buy in supply concerns, though uncertainties in the Middle East keep oil prices high, and higher-than-expected U.S. inflation dimmed hopes for any near-term easing in interest rates.

The benchmark three-month copper CMCU3 on the London Metal Exchange rose 0.78% to $14,130.50 a metric ton as of 0250 GMT after reaching $14,196.50, a more than three-month high.

And the most-active copper contract SCFcv1 on the Shanghai Futures Exchange jumped 1.65% to 108,490 yuan ($15,974.38) a ton, after also reaching an over three-month high of 108,900 yuan.

Investors continued to buy despite supply concerns. Freeport-McMoRan maintained its end-2027 timeline for a full recovery at Indonesia’s Grasberg mine, while traders monitored risks to the mining industry in Peru over fuel after state-run Petroperu sought $2 billion in state-backed loans.

After copper broke out of a prolonged trading range and climbed above $13,500 a ton, with little resistance on the upside, analysts at Chinese broker Galaxy Futures said, adding that momentum buying and stronger sentiment quickly pushed prices higher.

The red metal, often dubbed "Dr. Copper" for its role as a bellwether of the macroeconomy, is heading into its eighth consecutive day of gains despite unfavourable macro factors.

Oil prices slipped on Wednesday but remained elevated, with Brent LCOc1 above $107 a barrel, as investors watched a fragile ceasefire in the Iran war and awaited U.S. President Donald Trump’s meeting with Chinese President Xi Jinping.

Higher energy prices are feeding through into inflation. U.S. consumer prices rose 3.8% in the 12 months through April, the biggest increase since May 2023, while markets have largely priced out any chance of a Federal Reserve rate cut this year.

A stronger-for-longer rates outlook typically weighs on dollar-priced metals by lifting the U.S. currency =USD and raising financing costs.

Among other metals on the LME, aluminium CMAL3 gained 0.63%, zinc CMZN3 added 0.25%, lead CMPB3 rose 0.28%, nickel CMNI3 increased 0.44% and tin CMSN3 advanced 1.02%.

Elsewhere on SHFE, aluminium SAFcv1 ticked 0.22% higher, zinc SZNcv1 climbed 1.41%, lead SPBcv1 dipped 0.24%, nickel SNIcv1 dropped 0.36%, tin SSNcv1 was little changed, down only 0.04%.

Wednesday, May 13

DATA/EVENTS (GMT)

0645 France CPI (EU Norm) Final MM, YY Apr

0645 France CPI MM, YY NSA Apr

0900 EU GDP Flash Estimate QQ,,YY Q1

1230 US PPI Machine Manufacturing Apr

($1 = 6.7915 Chinese yuan renminbi)