Copper Drops to 3-Month Low

Copper decreased 2% to 5.3246 USD/Lbs

Copper futures in the US fell to below $5.4 per pound in March, the lowest in three months and tracking the decline for key industrial metals amid a strong dollar and concerns that high energy prices will dent manufacturing demand. Key oil and LNG prices held most of their surge this month after the conflict in the Persian Gulf resulted in the destruction of energy infrastructure and halted energy exports from tankers. The developments limited the outlook on manufacturing by biting factory's margins and limiting consumers' purchasing power. Additionally, the upside inflation risks drove Federal Reserve policymakers to strike a hawkish tilt in their economic projections, lifting the dollar and pressuring greenback-priced commodities. The drop was aligned with six-year high copper inventories in the LME and record high stocks in the SHFE, consolidating the lower bidding levels.

Copper futures rebounded to around $5.5 per pound on Friday after hitting multi-month lows in the previous session, supported by reassurances from the US and Israel regarding the Middle East conflict. US President Donald Trump said the US is not considering deploying ground troops against Iran, while Israeli Prime Minister Benjamin Netanyahu confirmed Israel would hold off on further strikes on Iranian energy infrastructure. The conflict has pressured metals markets amid concerns that rising energy prices could slow global manufacturing and economic activity. Despite the rebound, copper is set for a third consecutive weekly loss, as surging exchange inventories point to softer physical demand. Analysts highlighted weaker Chinese consumption and reduced shipments to the US, slowed by tariffs. Additionally, major central banks signaled a bias toward tighter monetary policy this week amid elevated inflation risks from higher energy costs.