Copper defies US-Iran war impact, nears record high
What's the story
Copper is on a record-high trajectory as traders overlook the US-Iran conflict and focus on supply-demand dynamics. Tight supply and falling inventories in China are driving copper's unique price trend. Meanwhile, crude oil prices have jumped due to fears over tightening global energy supplies after failed US-Iran peace talks and the ongoing closure of the Strait of Hormuz.
Supply disruption
China drives copper's price surge
The US-Iran conflict has nearly shut down the Strait of Hormuz, disrupting sulfur supplies from Middle East oil refineries and gas plants. This disruption has caused a spike in sulfuric acid prices and raised concerns over its availability for different industries. Industrial metals like copper are benefiting from China's strong exports, especially clean-tech goods that are copper-intensive.
Economic impact
Citigroup analysts' insights on copper's resilience
China's strong exports, including a 14% year-on-year (YoY) rise in April's headline figure, are boosting industrial metals. The demand for metals for energy transition and defense, along with supply challenges, will bolster copper's resilience even if the Strait of Hormuz remains closed for an extended period. This is according to analysts at Citigroup Inc. Copper was up 0.2% to $13,600/ton by 12:53pm Shanghai time on Monday, while aluminum gained 0.6% and nickel rose by 1.6%.