Copper Rises as Fed Signals Loom

Copper futures eased to $6.34 per pound on Wednesday from the one-week high of $6.4 in the previous session amid cautious optimism of resorted trade through the Persian Gulf. Iran claimed it has an unofficial draft on an agreement with the US that would halt their naval blockade on vessels exiting the Strait of Hormuz, although the claims were rejected by Washington. Still, the outlook of restated flows of sulfur and sulfuric acid from GCC economies, a major supply hub, improved expectations on that copper producers will regain access to inputs on the production process. The tight supply for the commodity, which is used by refiners through heap leaching and purifying copper to produce anodes, drove China to suspend exports. Consequently, the shortage in top copper producer Chile forced major refiners to cut capacity and lower supply. Meanwhile, supply from Codelco risked a pullback as the company is targeting roughly $2 billion in cost reductions.

Copper futures climbed to around $6.4 per pound on Wednesday, extending recent gains as markets cautiously priced in the possibility of a US-Iran peace agreement despite ongoing hostilities in the Middle East. President Donald Trump said negotiations to extend a ceasefire and reopen the Strait of Hormuz are still in progress, while US Secretary of State Marco Rubio cautioned that reaching a final deal could still take several days. Copper was also underpinned by the continued strength in AI-linked technology equities, which has reinforced expectations for stronger industrial demand driven by electrification trends and data center expansion, particularly in wiring and power infrastructure. On the supply side, lingering concerns tied to the Middle East conflict, including potential disruptions to sulfur availability used in copper smelting, added further support to prices.

Copper futures slipped below $6.4 per pound on Tuesday, trimming gains from the prior session as elevated uncertainty in the Middle East kept inflation and interest rate concerns in focus. The US military reportedly targeted missile launch sites and vessels suspected of attempting to deploy mines in southern Iran, though President Donald Trump said talks with Tehran were progressing well. Despite the pullback, copper prices remain underpinned by the strong rally in AI-related technology stocks since the start of May, supporting expectations for rising demand tied to electrification and data center wiring requirements. Additional support also comes from the global shift toward clean energy, which is expected to sustain longer-term copper consumption. Meanwhile, supply-side concerns linked to the Middle East conflict, particularly potential shortages of sulfur used in copper smelting, continue to lend underlying price support.