Copper prices on the London Metal Exchange pulled back from recent highs on Thursday, pressured by stalled US-Iran ceasefire talks and the continued closure of the Strait of Hormuz. A stronger US dollar added further downward pressure on the metal.
In Thursday's trading, three-month copper on the LME fell 1.4% to $13,247 per tonne, after earlier touching $13,481.50—its highest level since February 27. The retreat followed a rally in the previous session, when copper rose alongside equities on news of an extended US-brokered ceasefire agreement.
Market participants see little sign of resumed negotiations between the US and Iran. Iran's tightening control over the Strait of Hormuz has helped keep oil prices above $100 a barrel, fueling concerns over inflation risks. Analysts noted that the lack of progress in ceasefire talks and persistent uncertainty prompted a pullback across the base metals complex during early trading.
However, supply-side concerns provided some support for copper prices. Shipping disruptions in the Strait of Hormuz have raised the risk of sulfuric acid shortages, which could constrain global hydrometallurgical copper smelting capacity. Production in key hydrometallurgical copper regions, such as the Democratic Republic of Congo, has already been materially impacted.
In China, the most-traded copper contract on the Shanghai Futures Exchange ended daytime trading up 0.3% at 102,780 yuan per tonne, though it trimmed gains after rising as much as 1.7% earlier in the session. While demand from the world's top metals consumer had previously supported copper prices, the recent shift to a discount for spot copper versus futures suggests physical buying interest may be cooling.
Shares of Freeport-McMoRan, the world's largest publicly traded copper miner, fell sharply amid the weaker copper price and company-specific factors. Although the company's first-quarter earnings per share beat expectations, revenue fell short of market forecasts. The company also warned that recovery progress at its flagship Grasberg mine has been slower than expected due to a mudslide, leading it to lower its second-half production recovery outlook from 85% to 65%.
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