LONDON: Copper prices advanced to their highest in more than three months on Monday, as worries about supply shortages outweighed concerns about lower demand due to the stalemate in the Iran war.
Benchmark three-month copper on the London Metal Exchange gained 2.1% to $13,862 a metric ton in by 1430 GMT, its strongest since January 29.
It was on track to post a record closing high after notching up its sixth straight session of gains, the longest bullish run since December. Copper hit a record peak of $14,527.50 in January, but closed well below that.
Copper’s break on Friday above $13,500, which had been rejected several times since February, attracted funds that use technical levels, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“That price action looks pretty robust against the not-so-robust backdrop of the war in the Middle East. That
points to supply being equally challenged at a time where demand is called into question.“
Copper also received support after Freeport delayed the full resumption of its flagship Grasberg mine to early 2028 from the
previous expectation of late 2027.
The most-traded copper contract on the Shanghai Futures Exchange closed daytime trading 0.9% higher at 104,620 yuan ($15,396.39) a ton, after hitting a three-month high of 104,840 yuan.
Factory inflation in top metals consumer China beat expectations, data showed, raising hopes that the government’s efforts to boost the economy were having an impact.
LME aluminium gained 1.5% to $3,556 a ton on persistent worries about the impact of the conflict on producers in the Middle East, which accounts for about 9% of global supply.
“A rapidly tightening aluminium market has left investors questioning why the LME aluminium price has not rallied more,” Morgan Stanley analyst Amy Gower said in a note.
Tin advanced 2% to $54,970 a ton, its highest since March 2.
The metal that is largely used as solder for electronics is expected to benefit from global chip shortages amid ongoing supply issues at tin operations, broker Marex said in a note.
Among other metals, LME zinc added 1.1% to $3,468 a ton, lead edged up 0.3% to $1,981 and nickel rose 1.2% to $19,110.
Interesting that copper is rallying despite the Iran war stalemate. The technical break above $13,500 seems to have triggered a lot of fund buying.
Freeport delaying Grasberg until 2028 is huge—that mine is a major source. No wonder supply fears are driving prices even with demand uncertainty.
Six straight sessions of gains and a 2.1% jump to $13,862—this feels like the market is ignoring the broader economic risks. Can the rally last?
London has been at the center of developments like this before. This adds to the complex picture in London.
The trade mentioned here in London involving US and Iran is significant. This development needs careful monitoring going forward.
The financial aspect (2.1%) is noteworthy. Economic indicators like this deserve close attention.