By: Reuters

Copper edged lower on Wednesday morning, as volatility in the Middle East conflict and macroeconomic concerns offset continued price support from U.S. tariff expectations.

Benchmark three-month copper CMCU3 on the London Metal Exchange declined 0.36% to $13,566.5 a metric ton as of 0300 GMT.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 was down 0.38% to 104,010 yuan ($15,354.52) a ton.

Oil prices rose on Wednesday after the U.S. launched new strikes on Iran.

The war in the Middle East has pushed energy prices up and strained manufacturing, a key sector for copper demand.

Official data released on Wednesday showed China’s producer prices rising for a third straight month in May, to the highest level since 2022, driven by rising commodity prices and improved demand in certain industries.

Inflation concerns also remained front of mind, with markets looking to U.S. inflation data that's set to be released later on Wednesday. Better-than-expected U.S. jobs datalast Friday boosted the dollar and raised the likelihood of a Fed rate hike this year, rattling the copper market.

Higher interest rates generally dampen the demand prospects for growth-dependent industrial metals.

Price support continued to come from expectations of a decision on U.S. copper tariffs, likely in the second half of the year. The U.S. has floated a possible 15% levy on copper imports from the start of 2027, followed by 30% from 2028.

Total copper stocks in LME-registered warehouses MCUSTX-TOTAL have declined each day since May 28, according to LME data.

Among other LME metals, aluminium CMAL3 dropped 1.54%, zinc CMZN3 lost 0.58%, lead CMPB3 lost 0.55%, nickel CMNI3 lost 0.77% and tin CMSN3 dropped 1.86%.

Elsewhere on SHFE, aluminium SAFcv1 lost 0.89%, zinc SZNcv1 dipped 0.2%, lead SPBcv1 lost 0.59%, nickel SNIcv1 dropped 2.19% and tin SSNcv1 dropped 2.16%.

($1 = 6.7739 Chinese yuan renminbi)

(Reporting by Solomon Cefai; Editing by Ronojoy Mazumdar)