Copper Retreats on Ceasefire Concerns

Copper futures dropped 1% to around $5.7 per pound on Thursday, giving back gains from the previous session as a fragile US-Iran ceasefire weighed on risk sentiment. A senior Iranian official said elements of the ceasefire proposal had already been breached following fresh Israeli strikes on Lebanon, while Tehran continued to largely block the Strait of Hormuz. On Wednesday, copper had surged nearly 4% after the US, Israel, and Iran agreed to a two-week ceasefire aimed at enabling negotiations for a potential resolution to the conflict. The temporary reopening of Hormuz is expected to ease investor concerns over inflation and slowing global industrial activity, which have clouded metals demand. Earlier this week, Goldman Sachs noted near-term downside risks for copper if the critical waterway remained closed, as higher energy costs could weigh on global economic growth.

Copper futures jumped over 3% to $5.7 per pound on Wednesday, hitting a three-week high after Iran agreed to temporarily reopen the Strait of Hormuz as part of a two-week ceasefire with the US and Israel, easing demand concerns. President Donald Trump said the US had received a 10-point proposal from Iran that he described as a “workable basis for negotiations,” with the two-week window allowing the potential agreement to be finalized and implemented. The temporary reopening of the strategic waterway is expected to ease investor concerns about inflation and slowing industrial activity globally, which have clouded the demand outlook for metals. Earlier this week, Goldman Sachs highlighted near-term downside risks for copper if the Strait of Hormuz remained closed, as elevated energy costs could weigh on global economic growth.

Copper steadied around $5.6 per pound on Tuesday, holding within a sideways range for a fourth straight session as investors focused on President Donald Trump’s deadline for Iran to strike a deal or face attacks on civilian infrastructure. Trump warned he could target Iranian power plants and bridges if his conditions are not met by Tuesday 8 p.m. Eastern Time, including reopening the Strait of Hormuz. This overshadowed signs that the US and Iran may be moving closer to a ceasefire agreement through mediators. Meanwhile, Goldman Sachs flagged near-term downside risks for copper if the Strait of Hormuz remains closed, as elevated energy costs could weigh on global economic growth. The metal also remains down for the year amid ample supply and rising inventories, with London Metal Exchange stockpiles near six-year highs and Shanghai Futures Exchange holdings close to record levels.