Rising tensions in the Middle East have driven up energy prices and heightened risks to the global economy, pushing copper to its lowest point since December. Following attacks by Iran and Israel on energy facilities in the region, metals on the London Metal Exchange broadly declined. After Israel struck Iran's South Pars gas field, Iran retaliated by targeting the world’s largest liquefied natural gas plant. The escalation has prompted U.S. President Trump to urge de-escalation. With no clear end to the conflict in sight and oil prices surging, risk assets—including industrial commodities—are facing significant selling pressure. Wu Kunjin, head of base metals research at Minmetals Futures Co., noted, "This reflects concerns over the economy and inflation. The longer oil prices remain elevated, the greater the inflationary impact. While higher oil prices don’t automatically mean higher interest rates, the possibility cannot be ruled out." Copper began the year strongly, reaching a record high in late January, but has since fallen more than 8% this month. As of the latest update, copper was down 1.1% at $12,262 per ton. Traders are weighing potential supply disruptions—particularly in the aluminum market—against the threat of a broader economic slowdown should the conflict intensify. Even before the U.S. and Israel targeted Iran, metal demand had been soft. Aluminum edged down 0.2% to $3,393 per ton but remains up 13% year-to-date. Zinc, nickel, and tin also declined. Singapore iron ore rose 0.3% to $107.60 per ton. However, the sharp drop in metal prices could spur buying interest, especially among consumers who had been hesitant earlier in the year due to high prices. Wu added, "Lower prices have significantly improved consumption expectations in China, which should also help reduce inventories in the future."
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