Copper prices fell on Wednesday amid weak demand outlook, especially in China, with the US-China trade talks failing to allay fears. 

Copper three-month futures fell 1.2% at the London Metals Exchange to $9639 a ton, the lowest since June 5.

US and Chinese trade representatives said a trade framework has been reached, with both sides seeking approval from Trump and Xi Jinping to carry on discussions. 

This progress comes after an important deal reached in mid May, which stopped the enforcement of most tariffs for 90 days.

Earlier data showed China’s copper imports fell 2.5% to 427,000 tons in May compared to the previous month.

Prices were somewhat boosted by a drop in copper inventories at the London Exchange, becoming down 50% in three months at 119,450 tons.

Recent 50% US tariffs on steel and aluminum sparked concerns that copper imports to the US might face a similar tariff, disrupting global supply lines. 

Aluminum rose 0.7% today to $2509 a ton, while zinc added 0.2% to $2662, as nickel shed 0.4% to $15,250 a ton, while tin slipped 0.2% to $32,600, as lead gave up 0.2% to $1985 a ton.

Otherwise, the dollar index fell 0.2% as of 14:44 GMT to 98.8, with a session-high at 99.2, and a low at 98.5.

Copper July futures fell 1.9% in American trade to $4.80 a pound. 

US consumer prices rose 2.4% y/y in May, below estimates of 2.5%, but up from 2.3% in the previous reading. 

US core consumer prices rose 2.8%, below estimates of 2.9%, and same as the previous reading.

Oil prices rallied to a seven-week high on Wednesday as markets assess the results of the US-China trade talks, and amid pessimism about the US-Iran nuclear negotiations. 

Strong Gains

Brent futures rose 1.2% to $67.69 a barrel, while US West Texas futures added 1.5% to $65.94 a barrel.

The US and China reached a trade framework in London after two days of intensive negotiations, with representatives waiting for the final approval of Trump and Xi Jinping to move forward. 

This progress comes after an important deal reached in mid May, which stopped the enforcement of most tariffs for 90 days.

 Iran Pessimism 

On the other hand, US President Trump expressed his lack of confidence in the chances of reaching a nuclear deal with Iran that would stop uranium enrichment. 

Iran threatened to hit US bases in the Middle East if the US attempted an attack on Iranian infrastructure. 

OPEC+ Output

OPEC+ has decided to raise output by 411 thousand bpd in July, heaping more pressure on the prices.

Now traders await the weekly US inventory report from the Energy Information Administration later today, after initial data showed the stocks fell by 370 thousand barrels last week. 

Both the US dollar and the yuan stabilized on Wednesday after progress in the US-China trade talks in London, paving the way for calming the recent trade war. 

The US and China reached a trade framework in London after two days of intensive negotiations, with representatives waiting for the final approval of Trump and Xi Jinping to move forward. 

This progress comes after an important deal reached in mid May, which stopped the enforcement of most tariffs for 90 days.

Limited Movements for Global Currencies 

The US dollar edged up 0.7% against the dollar following the news to $1.141, while the yen stabilized at 144.91.

The yuan was little changed as well at 7.1873.

Ongoing Concerns

Despite the deal, analysts caution that tariffs remain much higher than their levels last year, and remain a burden on the global economy.

Investors are clearly losing confidence in US assets, with the dollar losing over 8% of its value since the start of the year.

Focus on UK Spending Plans

Markets are focusing on the UK Government’s distribution of over 2 trillion pounds of government spending between 2026 and 2029.

The pound shed 0.1% to $1.3483.

Markets will analyse the new US inflation data released today to gauge the likelihood of future Fed rate cuts.

They’re also closely monitoring an auction of US 10-year treasury yields worth $39 billion to gauge investor interest in US debt. 

Risky-linked assets lost ground today, with the Australian dollar down 0.25% to $0.6505, while the New Zealand dollar shed 0.33% to $0.6033.