Copper has surged 1.5% to $13,690 a ton on the London Metal Exchange as traders weighed the prospect of a deal to end the Iran war that has clouded global economic prospects. According to Bloomberg, US President Donald Trump said the pact isn't finalized but an agreement could be signed as soon as this weekend, although there's been no confirmation from Tehran. The prospect of an end to hostilities after more than three months of war has triggered broad gains for metals, with nickel gaining 0.8% and zinc rising 1.6% alongside copper's rally. An agreement would offer relief to metals by lifting the outlook for global economic growth, as materials like copper that stand to benefit from growing investment in artificial intelligence, power infrastructure and renewable energy have been trading above their pre-war levels for weeks.
Mining equities experienced significant gains as the Iran war resolution prospects boosted market sentiment. As per Bloomberg, Chinese copper miners including Zijin Mining Group Co. and CMOC Group Ltd. surged amid a spike in trading activity. Zijin, China's biggest miner of both copper and gold, jumped as much as 9.8% in Hong Kong for its biggest gain since 2023, while CMOC gained more than 14% at one point and Jiangxi Copper Co. rose as much as 10.6%. The rally reflects investor optimism about the potential economic recovery that could follow the resolution of Middle East tensions.
The latest price surge has reversed copper's previous decline from the three-week low when it fell below ₹1,325 amid Middle East tensions. The technical breakdown below this support level had opened the path for potential further decline to ₹1,265 as the most likely scenario, with support below this level positioned at ₹1,230. However, the current rally above ₹1,325 indicates a potential recovery toward the ₹1,385 resistance level. The broader uptrend remains valid despite the previous corrective phase, with the latest geopolitical developments providing additional momentum for copper prices.
Long-term demand prospects for copper are increasingly driving optimism for prices, with Jefferies Financial Group Inc. delivering a bullish upgrade to its copper forecasts while adding that a global recession would be a major risk. As reported by Bloomberg, a plan by Beijing to spend around 2 trillion yuan over the next five years on nationwide computing networks underscores the bullish demand outlook. China's domestic copper inventories have continued falling and orders from downstream manufacturers have been robust, according to Jia Zheng, trading manager at Suzhou Chuangyuan Harmony-Win Capital Management Co.. A more stable macroeconomic environment will help prices rebound toward levels seen earlier this year, with the prospect of US tariffs on the metal also offering upside risk for LME prices.
