Copper Recovers After Trump Announces Truce Between Israel and Iran

The price of copper hit a new high this week as the yuan strengthened and the dollar’s value declined after Washington announced a ceasefire between Israel and Iran. The announcement came just days after the U.S. authorized airstrikes on 3 nuclear facilities in Iran, dropping a total of fourteen bombs on the targets. 

The London Metal Exchange saw three-month copper rise to $9760.50 per metric ton before slowly dipping to $9743.50. 

Reducing copper stocks in warehouses registered under the London Metal Exchange (LME) hint at increases in demand for physical copper, with key players holding onto the metal and ownership rights. This continues to limit the supply of copper for immediate use, driving up prices for short-term delivery compared to future delivery. 

Since February, copper inventories at these warehouses have diminished by more than 60% to reach 94,675 tons. This is their lowest level since 2023, with traders continually diverting metal to America to benefit from the COMEX copper futures premiums. These higher premiums make it more profitable to sell copper in the American market rather than in Asia or Europe. 

One trader revealed that copper prices on the LME were significantly lower than the COMEX, making it hard to attract deliveries. 

This comes as the United States considers whether to impose tariffs on the red metal’s imports. Such a move could have wide-reaching implications for trade globally, potentially affecting both consumer prices and industrial costs of production. 

Meanwhile  aluminum saw its price drop to $2581 per ton as the ceasefire between Israel and Iran eased concerns about disruptions to major shipping routes such as the Strait of Hormuz. The Strait is a key passage for exports from producers in the Middle East, including aluminum producers in Bahrain and the UAE. 

The price drop was observed shortly after the metal hit a 3-month high of $2654.50, with the ceasefire also driving oil prices down. 

Aluminum production is energy-intensive, particularly in countries where it is powered by fossil fuels. Lower oil prices reduce production costs, which may put downward pressure on aluminum prices as it allows producers to increase supply. 

Lead on the LME also settled at $2024.50, representing a 1.1% increase, after its price rose to $2025.50. Nickel also saw its price hit $14990, representing a 1.3% increase, while the price of tin per ton settled at $32,670. Additionally, zinc saw its price per ton reach $2711, representing a 0.9% increase. 

As the copper supply crunch on the LME continues to grow, entities like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) could deliver additional shareholder value as investor attention goes to firms working to develop new mining facilities. 

NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF 

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