Copper Heads for Sharp Monthly Fall

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.

Copper held below $5.5 per pound on Monday, struggling for traction as investors navigated ongoing hostilities in the Middle East that showed no signs of easing. Tensions escalated as Iran-backed Houthi militants in Yemen joined the conflict, targeting Israel over the weekend. President Donald Trump also said he could “take the oil in Iran,” echoing the US military operation in Venezuela earlier this year. Copper and other industrial metals have come under pressure this month as disruptions from the conflict and surging energy prices heightened concerns over inflation and slowing global industrial activity. Upward price pressures have also reinforced expectations that major central banks may raise interest rates this year, with markets now pricing in a potential rate increase from the Federal Reserve, a sharp reversal from earlier expectations for two rate cuts.

Copper rose toward $5.5 per pound on Friday and was set for its first weekly gain since the Middle East conflict began, supported by hopes for a diplomatic resolution between the US and Iran. President Donald Trump extended the deadline to strike Iranian energy infrastructure by 10 days to allow for negotiations, adding that Iran had permitted 10 oil tankers to pass through the Strait of Hormuz this week as a gesture of goodwill. However, reports indicated the Pentagon is considering sending up to 10,000 additional ground troops to the region, giving the White House more options at the negotiating table. Copper and other metals have come under pressure this month as disruptions from the conflict and surging energy prices heightened concerns over inflation and slowing global industrial activity.