Quick overview

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Pessimism about the prospects for a deal to end the Middle East conflict caused copper to drop from a three-week high.

Three-month futures fell below $14,000 per ton after rising 3% in the first two sessions of the week. An increase in strikes, such as the US attacking Qeshm Island and the Iranian attacking Kuwait, kept tensions high.  This year, the war has hurt copper because it has raised expectations for rate increases to fight inflation, which could reduce demand.

However, after strikes against aluminum producers in the Persian Gulf, the fighting has contributed to aluminum reaching a four-year high.

This month, traders of the red metal are also anticipating a US tariff decision that could result in an import duty from the administration. Before that, US copper stockpiles had increased, making things more difficult elsewhere. After closing at $14,040.50 on Tuesday, the highest since May 13, copper dropped 0.4 percent to $13,983 per ton on the London Metal Exchange.

However, A shortage of sulfur from the Middle East has put some African mines’ production prospects in jeopardy, exacerbating already-existing disruptions at other significant locations worldwide. However, China, the world’s largest consumer, is largely responsible for the resilient demand for copper, which has seen strong consumption across the power grid, renewable energy, and artificial intelligence sectors.

According to Li Xuezhi, head of research at Chaos Ternary Futures Co., industrial metals are recovering significantly as concerns over the war in Iran ease, driven by supply problems and strong demand.

Copper futures on New York’s Comex reached a record $6.69 per pound in anticipation of US tariffs on refined metal imports, raising their premium to LME copper above $500 per ton. The effect of the possible duties is to draw refined copper into the United States while depleting supplies in other countries.

The US Commerce Secretary is expected to provide an updated report on the domestic copper market by June 30 as part of a broader initiative to boost supplies of a metal essential to global electrification.

Meanwhile, growing shortages of raw materials at mines have started to affect China’s production of refined metal. Beijing Antaike Information Co. claims that… April’s output of refined copper was 1.05 million tons, a 3% decrease from March, as scrap used as feedstock was constrained by restrictions, and concentrate treatment costs continued to decline