Copper Pressured by Risk-Off Mood

Copper futures in the US rose past $5.6 per pound, extending the rebound from the three-month low of $5.34 in late March as de-escalatory rhetoric from US and Iranian authorities regarding their war improved the outlook for global manufacturing. Both US and Iranian presidents called for the end of the war should their respective conditions be met, raising hopes that an eventual resolution to the conflict would restart energy exports from the Persian Gulf and prevent a global stagflation crisis. Besides improving the outlook for factory activity, the pullback in the dollar on lower safety demand supported dollar-priced commodities. Still, copper remained 10% lower since the start of the year, as ample supply dimmed speculative bets that mining output will not keep up with datacenter and grid construction. Stockpiles at LME warehouses were close to their highest in six years, and those at the SHFE were near their highest on record.

Copper fell around $5.6 per pound on Wednesday, giving back earlier gains as the initial relief from easing geopolitical tensions in the Middle East faded. Although US President Donald Trump suggested military strikes on Iran could wind down within two to three weeks, uncertainty around the conflict continued to weigh on sentiment. Broader demand concerns also persisted, even as hopes of reduced oil-driven inflation pressures briefly supported the outlook for industrial metals. A softer US dollar offered limited cushioning, but was not enough to offset overall caution in the market. In China, demand signals remained uneven, with inventory movements at the Shanghai Futures Exchange offering only modest reassurance about consumption trends. China’s RatingDog Manufacturing PMI for March also eased to 50.8, below expectations of 51.6 and down from 52.1 in February.

Copper held steady near $5.5 per pound on Tuesday but remained on track to lose nearly 10% in March, marking its worst monthly performance since July last year. Copper and other industrial metals have come under sustained pressure this month as disruptions from the Middle East conflict and surging energy prices raised concerns about inflation and slowing global industrial activity. Copper miners are also expected to face higher costs and weaker profitability due to heightened uncertainties surrounding the Iran war and the effective closure of the Strait of Hormuz. The conflict has disrupted oil and LNG shipping, affecting copper operations that rely heavily on these energy sources. Many mining sites depend on diesel-powered machinery, while processing mills typically rely on stable grid power to refine ore.