(Bloomberg) — Copper jumped the most in more than a month, nearing a record intraday high as it shrugged off the apparent deadlock between the US and Iran over how to end the war and reopen the Strait of Hormuz.
All main metals contracts on the London Metal Exchange posted gains, after the bourse’s combined gauge of prices ended Friday on an all-time high. Metals from copper to zinc have been resilient in the face of the Middle East war, partly thanks to signs of demand outstripping supply.
Last week’s upward momentum carried into Monday despite US President Donald Trump rejecting Iran’s latest peace proposal as “totally unacceptable,” with the two sides far apart on a framework to end the conflict. Metals rose as equities steadied, suggesting investors aren’t greatly concerned about a serious escalation.
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Copper prices have surged due to a combination of tight supply and declining inventories in China. Signs of demand outstripping supply, coupled with factors like the energy transition and defense needs, are also boosting copper’s resilience.
The conflict has disrupted supplies of crucial raw materials, leading to increased prices for printed circuit boards (PCBs). Shortages of materials like glass fiber and copper foil, which are key components in PCBs, have also driven up costs.
Copper accounts for approximately 60% of the total raw material costs in PCB manufacturing. Shortages and price increases in copper directly impact the overall cost of producing PCBs.
Most base metals, including copper and aluminum, have shown significant gains this year. This resilience is partly attributed to demand outstripping supply and the boost from China’s robust exports, particularly in clean-tech goods which are copper-intensive.
Beyond geopolitical events, copper’s price trend is primarily driven by tight supply and declining inventories in China. Demand for metals in the energy transition and defense sectors also contributes to its resilience.
“The market has moved on from the impact of the US-Iran conflict, and copper has its own distinct price trend now,” said Jia Zheng, trading manager at Suzhou Chuangyuan Harmony-Win Capital Management Co. This is primarily due to factors such as tight supply and declining inventories in China, she said.
Copper rose 2.7% to settle at $13,943 a ton, a fresh record closing price, surpassing the previous peak of $13,618 hit on January 29.
Most base metals are now solidly higher so far this year, despite sharp dips in the opening weeks of the Iran war as investors fretted about serious fallout for the global economy. Copper is up about 12% since the end of 2025, and there were plenty of bullish takes at a major gathering of metals-market participants in Hong Kong last week.
Industrial metals are also getting a boost from China’s robust exports — the April headline figure rose 14% from a year earlier — including booming shipments of clean-tech goods, which tend to be copper-intensive.
Demand for metals for the energy transition and defense, coupled with supply headwinds, will boost copper’s resilience in a worst-case scenario that entails a prolonged closure of the Strait of Hormuz, according to Citigroup Inc. analysts.
Traders are also monitoring market disruptions in China, where a regulatory crackdown on a form of metals-backed financing has triggered turmoil for some companies. The issue has limited supplies of scrap, narrowing the usual discount between scrap prices and refined copper, said Zheng.
Aluminum rallied more than 2% while nickel gained 1.9%. The closure of Hormuz impacts aluminum smelters in the Gulf and nickel producers elsewhere who depend on the region for supplies of sulfur.
“Aluminum continues to underperform on ‘de-escalation’ days for the Middle East conflict, but given the long timeframe needed to restart smelters, we think this may offer buying opportunities,” Morgan Stanley analysts led by Amy Gower said in a note. “Aluminum could also see further support, in LME prices or regional premiums, if we see further curtailments in the Middle East if the Strait of Hormuz is closed for longer.”
–With assistance from Yvonne Yue Li.
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