Copper Falls as Iran War Persists

Copper dropped more than 1% to around $5.45 per pound on Thursday, reversing gains from the previous session as conflicting statements from the US and Iran over potential peace talks weighed on metals markets. Washington has maintained that negotiations are ongoing, with the Trump administration reportedly sending a 15-point proposal to Iran via Pakistan aimed at resolving the conflict and reopening the Strait of Hormuz. However, Iran said it has no intention of holding talks with the US and would reject a US ceasefire offer, instead setting its own conditions, including sovereign control over the strategic waterway. Disruptions from the Middle East conflict and surging energy prices have raised concerns about inflation and slowing industrial activity globally, clouding the demand outlook for metals.

Copper climbed to above $5.5 per pound on Wednesday, erasing the previous session’s losses as hopes for a Middle East ceasefire supported a broad rebound across metals markets. The US is reportedly pursuing diplomatic talks to end the war with Iran, though regional mediators are still awaiting a response from Tehran after it denied engaging in any negotiations with Washington. Copper and other metals had recently faced heavy selling pressure as the Iran war drove energy prices sharply higher, raising inflation risks and weighing on global growth prospects. Meanwhile, lower prices appeared to attract stronger Chinese buying, with industry data showing that China’s copper inventories posted their largest weekly decline this year. Manufacturing demand in China also continued to recover following a slowdown during the Lunar New Year holidays in February.

Copper dropped below $5.4 per pound on Tuesday, trimming gains from the previous session as hopes for a de-escalation in the Middle East conflict faded after Iran denied holding talks with the US to end the standoff. Tehran dismissed President Donald Trump’s announcement as an attempt to manipulate financial markets and launched new attacks on US targets, while Israel continued strikes against Iran. On Monday, copper had rebounded nearly 2% after Trump postponed planned US strikes on Iranian energy infrastructure, claiming negotiations were underway. The outcome of any talks and the potential reopening of the Strait of Hormuz remain highly uncertain, keeping traders cautious. Additionally, robust inventories at global exchanges continued to weigh on prices, with LME stockpiles near six-year highs and HFE inventories close to record levels.