Key Takeaways
- Copper prices fell 0.88% to $13,479.5 per metric ton on the London Metal Exchange.
- The Shanghai Futures Exchange saw copper drop 0.63% to 103,650 yuan ($15,299.12) a ton.
- Oil prices rose by nearly 12% this week due to Middle East tensions.
Copper and most industrial metals experienced a decline on Friday, reflecting heightened risk sentiment amid ongoing conflicts in the Middle East. The London Metal Exchange reported that benchmark three-month copper fell 0.88%, closing at $13,479.5 per metric ton by 0300 GMT. Similarly, the Shanghai Futures Exchange witnessed a drop of 0.63% to 103,650 yuan ($15,299.12) a ton for copper.
The deteriorating situation in the Middle East has disrupted shipments through the Strait of Hormuz, leading to inflation concerns and casting doubt on future demand prospects. This uncertainty has also affected oil prices, which climbed nearly 12% this week, with Brent crude reaching significant gains by Friday.
Despite these challenges, recent economic data for June provided some relief, slightly softening market sentiment. Data from China, the world's largest consumer of copper, supported demand, as evidenced by good buying interest and a high Yangshan premium at $95 per ton since May 2025. However, other metals like nickel saw losses, with LME nickel dropping 1.88% and SHFE nickel falling 1.18%, erasing much of the previous day's gains.
Aluminium also experienced a decline, losing 0.5% on the London Metal Exchange, while zinc lost 1.09%. Lead saw a slight increase of 1.8%, but tin dropped by 1.7%. The overall trend for industrial metals was one of mixed performance, with some metals holding their ground or even gaining slightly, while others faced significant declines.
The market's reaction to the Middle East conflict highlights its impact on global economic health indicators like copper, which is often referred to as a 'bellwether' due to its sensitivity to economic conditions. The fluctuation in prices reflects investors' concerns about the potential long-term effects of ongoing geopolitical tensions on supply chains and demand forecasts.
While higher interest rates pose a challenge for growth-dependent industrial minerals by dampening economic activity, recent data from China has provided some support to the market. However, the overall sentiment remains cautious as traders await further developments in the Middle East that could significantly impact global trade and metal prices.
