Copper rises on weaker dollar and downgrade to Chile production outlook

By Polina Devitt

LONDON, Nov 2 (Reuters) - Copper prices rose on Monday, supported by a weaker dollar, lower oil prices and a downgrade to Chile's copper production outlook, though investors remained cautious ahead of Tuesday's US midterm elections.

Benchmark three-month copper on the London Metal Exchange was up 0.7% at $14,251 a metric ton by 1034 GMT.

The dollar eased and oil prices fell after talks between Iranian and Qatari officials aimed at pushing for a deal to end the US-Israeli war on Iran. Brent ended October at its highest in six months on concerns that tensions could flare again after the US midterm elections.

Meanwhile, copper inventories in LME-registered warehouses rose to 293,775 tons, their highest since mid-July, after 20,500 tons were delivered in New Orleans , daily exchange data showed.

"The only deliveries we've seen onto the LME stocks have been in the US and, arguably, material held there is not having the same impact on the curve as it would if deliveries had been made in Europe or Asia," said Morgan Stanley analyst Amy Gower.

"The market is treating US stocks as largely unavailable for now."

Traders have been shipping copper to Comex-approved warehouses in the US since President Donald Trump ordered a study into potential copper tariffs in February last year.

While incentives to move metal to the US have diminished as tariff uncertainty drags on, the risk remains high enough to keep inventories there, with some material also flowing into LME warehouses in the US.

On the supply side, Chile's copper commission, Cochilco, sharply lowered its forecast for the country's copper production this year and forecast a more modest 2027 recovery than previously expected. Chile is the world's largest copper producer.

Among other LME metals, aluminium fell 0.3% to $3,060.50 a ton, zinc rose 0.3% to $3,852, lead lost 0.3% to $1,902.50 while tin and nickel added 1.2% to $49,325 and $15,445 respectively.