Copper retreats from record high as geopolitical risk rises
Copper dropped 0.4% to $14,645.50 a tonne after hitting a record peak. Middle East tensions and US inflation data are now weighing on prices.
Copper traded at 14,645.50 US dollars per tonne on Wednesday. This represented a 0.4% decline from Tuesday's all-time high. The drop occurred as traders reassessed risk ahead of key US economic data.
The LME all-in index for six base metals reached a record on Tuesday. Zinc crossed 4,000 US dollars per tonne for the first time since 2022. Aluminium and copper both posted fresh peaks before the recent pullback.
Geopolitical conflicts impact metal flows
Escalating hostilities in the Middle East threaten global growth. The US reported attacks on Iranian oil tankers after Iran targeted a US warship. Brent crude topped 100 US dollars per barrel. These developments create inflationary pressure that could suppress industrial metal demand.
Supply constraints have tightened the physical market. Hundreds of thousands of tonnes of copper moved to the US to avoid import tariffs. This shift has left LME inventories underserved. Zinc ore supply remains under significant strain. Aluminium flows from the Middle East have been disrupted by the conflict.
Macroeconomic uncertainty pressures valuations
Market participants are cautious regarding US inflation data. Consumer price figures are scheduled for release on Friday. Shifting expectations for Federal Reserve policy could pressure copper prices. Analysts note that macroeconomic uncertainty remains a primary risk factor for the sector.
The LMEX Index has gained over 40% in the past year. This surge reflects a broader tightening of metals markets. However, the recent retreat from record levels highlights sensitivity to geopolitical and monetary policy shifts. Traders are monitoring the interplay between supply deficits and macro headwinds.
Recent performance across key metals
Aluminium, nickel, and lead dipped alongside copper on Wednesday. Zinc and tin edged higher during the same period. The divergence suggests mixed sentiment across different base metals. Source reports indicate that the market is adjusting to new supply and demand realities.
