Key facts
- Copper prices increased as an interim peace agreement between the US and Iran eased fears over global economic growth.
- The agreement aims to cease hostilities, reopen the Strait of Hormuz, and initiate negotiations on Iran's nuclear program.
- Copper climbed as much as 1.4% on the London Metal Exchange (LME).
- Mining stocks, including Zijin Mining Group and CMOC Group, saw significant gains.
- Analysts project a structural annual copper supply deficit of approximately 491,000 tons through 2030.
Copper prices surged as an interim peace agreement between the US and Iran eased concerns about global economic growth and boosted optimism for metals demand. The industrial metal climbed as much as 1.4% after both sides announced a deal to cease hostilities, reopen the Strait of Hormuz, and begin negotiations on Iran’s nuclear program.
This potential de-escalation removes a significant downside risk for metals at a time when analysts are generally bullish on copper. Mining equities also saw broad gains, with Chinese copper miners like Zijin Mining Group Co. and CMOC Group Ltd. experiencing significant trading activity and stock price increases.
Analysts at Jefferies Financial Group Inc. have forecast an average annual copper supply deficit of 491,000 tons through 2030, suggesting that structural supply constraints will underpin prices long-term, even with temporary macroeconomic shifts. China's domestic copper inventories have been falling, and orders from downstream manufacturers have remained robust, further supporting demand.
Copper rose 1.2% to $13,690 a ton on the LME, while nickel and zinc also saw gains. COMEX futures for copper rose 1.8% to approximately $6.39 per pound. Despite the positive sentiment, some analysts warn of near-term price volatility.