Copper Pressured by Middle East Uncertainties

Copper futures hovered around $6 per pound on Monday, trading largely sideways as stalled US–Iran peace efforts and ongoing disruption in the Strait of Hormuz kept energy prices elevated and inflation risks in focus. US President Donald Trump has instructed negotiators to suspend discussions, while Iranian President Masoud Pezeshkian reiterated that Tehran would not engage in “imposed negotiations under threats or blockade.” Industrial metals, including copper, have faced headwinds from rising inflation concerns that could prompt tighter monetary policy, alongside mounting growth risks that may dampen global demand. Still, downside pressure has been partly offset by restocking activity in China ahead of the May 1–5 Labor Day holiday. Official data also showed Chinese smelters produced a record 1.33 million tons of refined copper in March.

Copper futures fell to below $6 per pound on Friday after reaching near two-month highs earlier in the week, as stalled US-Iran peace efforts and continued disruption in the Strait of Hormuz kept energy prices elevated and inflation risks in focus. Tehran continues to maintain control of the strategic waterway and has reportedly fired on commercial vessels this week, while the US blockade of Iranian ports remains in place, sustaining pressure on the Islamic Republic. Copper and other industrial metals have faced headwinds from inflation concerns that could prompt tighter monetary policy, alongside growth risks that may soften global industrial demand. Still, downside pressure has been partially cushioned by restocking activity in China ahead of the Labor Day holiday from May 1 to 5. Official data also showed Chinese smelters produced a record 1.33 million tons of refined copper in March.

Copper futures climbed back above $6 per pound on Wednesday, rebounding from the previous session’s losses as restocking activity in China picked up ahead of the Labor Day holiday from May 1 to 5. Official data also showed Chinese smelters produced a record volume of refined copper in March, as elevated prices for byproduct sulfuric acid boosted output and improved industry margins. Production rose to 1.33 million tons, the highest level in data dating back to 1990. However, copper output is expected to ease in April and the following month due to seasonal maintenance at smelters, with the bulk of the impact likely to be felt in May. Elsewhere, Australian mining giant Rio Tinto reported a 9% increase in first-quarter copper production, driven by ramped-up operations at the Oyu Tolgoi mine in Mongolia.