Updates prices
By Ashitha Shivaprasad
June 17 (Reuters) - Copper prices fell on Tuesday as the fifth day of air strikes carried out by Israel and Iran deepened concerns about Middle East instability and its dampening effect on global growth and demand for industrial metals.
The firmer dollar, in which metals are priced, reinforced negative sentiment.
Benchmark copper on the London Metal Exchange (LME) was down 0.3% at $9,677 a metric ton at 1634 GMT.
Global stocks slid while oil rose as the air war between sowed fears of a broader regional conflict. Higher oil prices dampen economic growth and stoke inflationary pressures.
"Another war has broken out, unsettling investors, raising concerns about long-term global growth, and prompting a shift away from cyclical assets like base metals and a move towards safe-haven assets," said Panmure Liberum analyst Tom Price.
The U.S. dollar index rose, making dollar-priced commodities more expensive for buyers holding other currencies.
Meanwhile, Citi said in a note it expected copper prices to fall to $8,800 in the third quarter if the U.S. imposes tariffs on copper imports.
President Donald Trump in February ordered a into possible tariffs on copper imports to rebuild U.S. production.
The probe has resulted in a price premium for COMEX copper futures against LME contracts, which traders and producers have capitalised on by diverting copper supplies from other markets to the United States. ,
U.S. COMEX copper futures traded at $4.7955 lb, bringing the premium over LME copper to near $900 a ton.
Concerns about copper availability in the LME system due to falling stocks and large holdings of warrants - title documents conferring ownership - and cash contracts pushed up the premium for nearby contracts.
The backwardation or premium for the cash over the three-month copper contract jumped above $122 a ton, its highest since October 2022, compared with a discount at end-April.
Elsewhere, traders said three-month aluminium rose 1.5% to $2,552 a ton due to large holdings of warrants and futures contracts to buy nearing maturity .
In other metals, zinc fell 0.7% to $2,640, nickel shed 0.4% to $15,015 and tin edged down 0.5% to $32,450. Lead was down 1.3% at $1,982.
(Reporting by Ashitha Shivaprasad in Bengaluru; editing by David Evans, Emelia Sithole-Matarise and Tomasz Janowski)
((Ashitha.Shivaprasad@thomsonreuters.com [Ashitha.Shivaprasad@thomsonreuters.com];))
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