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Commodities · Copper · Inflation · Middle East Conflict
Copper prices plunged over 8% in March, reaching their lowest point since last December, as escalating conflict between Iran and Israel in the Middle East drove up energy prices and intensified global economic growth and inflation concerns.
The latest hostilities, following Israel’s strike on Iran’s South Pars gas field and Iran’s retaliation against the world’s largest liquefied natural gas (LNG) plant, led to LME metals falling across the board. U.S. President Trump urged de-escalation, but soaring oil prices are pressuring risk assets, including industrial commodities.
Wu Kunjin, head of base metals research at Minmetals Futures Co., stated that prolonged high crude oil prices increase inflation impact and the possibility of interest rate hikes. Copper, which hit a record high in late January, was down 1.1% to $12,262 per ton at press time.
Aluminum prices fell 0.2% to $3,393 per ton but remain up 13% year-to-date, while zinc, nickel, and tin also declined. Iron ore in Singapore rose 0.3% to $107.60 per ton.
Despite the broad decline, Wu Kunjin noted that lower prices could stimulate Chinese consumption and reduce inventories. SunSirs reported its benchmark copper price at RMB99,083.33 per ton on March 19, a 2.99% decrease from the beginning of the month (RMB102,136.67 per ton).
