Key Takeaways
- Copper prices fell on Friday, tracking equity markets lower.
- Escalating tensions between the U.S. and Iran disrupted shipments through the Strait of Hormuz.
- Benchmark three-month copper on the London Metal Exchange was down 1.3% at $13,419.50 a metric ton.
Copper prices experienced a decline on Friday, following a broader market downturn as tensions in the Middle East intensified concerns over inflation and dampened demand expectations for industrial metals.
The escalation of conflict between the United States and Iran has disrupted shipping routes through the Strait of Hormuz, leading to an increase in oil prices by 12.7% this week. This disruption has also raised fuel costs for metal producers, contributing to the downward pressure on copper prices.
Benchmark three-month copper on the London Metal Exchange saw a decrease of 1.3%, trading at $13,419.50 per metric ton by 0930 GMT. The price had edged up slightly by 0.1% the previous day but was expected to close the week with a decline of 0.5%. Additionally, COMEX copper prices fell more steeply by 1.9%, trading at $6.22 per pound.
The White House has not yet announced any proposed import tariffs on refined copper, which could have further impacted market sentiment. Analysts from BMI, a unit of Fitch Solutions, noted that without clear directional catalysts from tariffs, copper prices are likely to remain lower in the coming months due to weak industrial demand and minimal supply disruptions from the US-Iran conflict.
Despite these challenges, tight inventories provided some support to copper prices. LME copper stocks fell below 300,000 tons to 296,625 tons, marking the lowest level since March. Approximately 56% of these stocks are in cancelled warrants, making them unavailable for immediate market access.
In China, Shanghai Futures Exchange copper stocks dropped by 20.3% from the previous week to 79,909 tons, the lowest level since August. The Yangshan premium, a measure of Chinese demand for imported copper, remained at $95 per ton on Thursday, its highest since May 2025.
Other industrial metals also faced downward pressure: aluminium fell by 1%, zinc slipped by 1.6%, lead lost 0.2%, and tin shed 1.4%.
