SunSirs: LME Metals Review on February 23

LONDON, Feb 23 (Reuters) - London Metal Exchange (LME) copper futures fell on Monday, retreating from more than a week's high reached in the morning session, as exchange inventories continued to rise and the outlook for U.S. tariffs remained uncertain, with the market focused on trading on Tuesday after the Chinese New Year holiday.

As of 1700 GMT, LME three-month copper fell 0.57% to $12,843 per tonne. The contract had touched a more than one-week high of $13,050 in earlier trading.

In 2025, LME copper surged 42%, marking its biggest annual gain in 16 years, driven by supply concerns stemming from production disruptions at major copper mines and demand growth fueled by artificial intelligence and the energy transition. Entering 2026, copper prices continued to rise, fueled by speculative buying, reaching a record high of $14,527 per tonne at the end of January. However, as concerns arose about high prices damaging spot demand, copper prices have since fallen 11.60% from their historical peak.

Nitash Shah, a strategist at WisdomTree, noted that increased inventories outside the U.S. have dampened copper price gains, potentially indicating slightly weaker demand. However, it's difficult to determine whether the inventory increase stems from a shift from off-exchange warehouses to exchanges or reflects overall weakening demand.

Data released on Monday showed that copper inventories in LME policy warehouses increased by 6,675 tonnes to 241,825 tonnes, the highest level since March 2025, with LME copper inventories growing by 70% year-to-date.

Traders are also waiting for the Shanghai Futures Exchange to reopen on Tuesday, after it was closed for the Lunar New Year holiday.

According to Robert Montefusco, an analyst at Sucton Financial, the key lies in what actions Chinese buyers will take upon returning from their holidays and whether this will generate additional domestic demand, which has been consistently weak. We can only wait and see.

On Monday, LME three-month nickel fell 0.3% to $17,300 per tonne, erasing earlier gains. This followed comments from officials in Indonesia, the world's largest nickel producer, that the country was considering revoking a company's environmental permit after a landslide occurred at a mine waste area near the company's nickel processing center.

Other LME metals closed as follows: LME aluminum fell 0.4% to $3,091 per tonne; zinc fell 0.9% to $3,353 per tonne; lead fell 0.6% to $1,952.50 per tonne; and tin rose 2.5% to $47,735 per tonne.

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