(Bloomberg) -- Copper’s rally stalled after US inflation numbers came in slightly above expectations and caused futures to retreat from highs not seen since January 2023.

This week’s gains were pared following a Wednesday report that showed US consumer price increases hadn’t slowed as much as expected. The data will make it tougher for the Federal Reserve to justify cutting interest rates in June, potentially weighing on economic growth.

There are other reasons for caution. Spot copper is trading at a $133-a-ton discount to three-month LME futures — a so-called contango structure that can indicate ample immediate supply. Global inventories are near their highest since June 2020 and spot sales in China are also trading at a discount to futures contracts.

Still, the broader backdrop for copper is positive, with the metal up almost 10% this year. Analysts at Bank of America Corp. and Citigroup Inc. say that mine supply will struggle to keep up with increases in demand from areas like electric-vehicle infrastructure and renewable energy. 

Copper fell 0.6% to $9,364.50 a metric ton at 5:05 p.m. in London. Zinc climbed 1.1% and tin rose 2.1%, rebounding after a brief slide brought on by the US inflation numbers.

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