Copper edges higher, others slip on uncertainty

Copper prices drifted higher on Tuesday, buoyed by hopes for firmer Chinese demand, but investors were cautious about the impact of tariffs on economic growth and inflation.

The three-month copper contract on the London Metal Exchange added 0.2% to $9,884 a metric ton, as of 0912 GMT, having hit its highest in nearly two weeks in the previous session. "The Chinese government's working plans to stabilise industrial growth and the launch of the giant Tibet hydropower plant are all positive signals to the metals market," a Beijing-based futures analyst said.

Other LME base metals were weaker amid concerns about negotiations ahead of an August 1 deadline for countries to secure trade deals with the U.S. or face steep tariffs.

"There are a lot of reasons to be cautious for the month ahead. We might see a pullback in terms of the base metals," said Dan Smith, managing director at Commodity Market Analytics.

"I think the next month or two could be pretty interesting with all this pressure on the Federal Reserve to cut rates, but actually inflationary pressure is potentially building in the U.S."

The period until September is also a seasonally weak period for demand, Smith added.

On the Shanghai Futures Exchange, however, aluminium prices hit their highest since November, with the most active contract rising 0.75% to 20,900 yuan ($2,913.26) a ton.

"Aluminium fundamentals are the most solid among metals in China," a Shanghai-based metals analyst at a futures company said.

LME aluminium slipped 0.3% to $2,639.50 a ton, zinc eased 0.2% to $2,832, lead lost 0.3% to $2,009, nickel dipped 0.1% to $15,505 and tin was little changed at $33,800.