Copper’s Price Trajectory Now Hinges on US Tariff Decision

Months after Operation Epic Fury disrupted global metals markets, uncertainty surrounding the Strait of Hormuz is no longer the dominant force shaping copper prices. Although conflicting messages from Iran over whether the waterway is fully operational continue to create some uncertainty, the market’s attention has increasingly shifted toward Washington, where an impending decision on U.S. copper tariffs is expected to have a far greater influence on prices.

Following the recent memorandum of understanding, the United States has until nearly the end of this month to complete the removal of its naval blockade, while Iran has only pledged to make its best efforts to restore shipping to pre-conflict levels.

That uneven commitment has kept some geopolitical risk embedded in commodity markets, but investors are gradually reducing the premium previously attached to supply disruptions in the Gulf. The London Metal Exchange’s base metals index reflected that transition during the first half of the year, finishing largely unchanged after sharp swings in both directions.

Beneath the headline performance, however, individual metals told very different stories. Aluminum experienced one of the strongest war-related rallies after missile attacks on smelters in the UAE and Bahrain temporarily removed roughly two million tons of annual production capacity between February and May.

Prices climbed above $3,780 per ton early last month, reaching their highest level in four years before retreating as expectations of gradually improving regional operations reduced supply concerns.

Copper also benefited from disruptions linked to the conflict. Constraints on sulfuric acid availability affected leaching operations, while sharply lower treatment and refining charges squeezed smelter profitability, pushing prices above $14,000 per ton last month.

However, traders now view U.S. trade policy as the primary catalyst for the next major move. Attention is focused on Commerce Secretary Howard Lutnick’s review of the domestic refined copper market, submitted on June 30. The report is expected to guide President Trump’s decision on whether to introduce tariffs of at least 15% at the start of next year.

The delay in announcing a final decision suggests policymakers continue to face strong lobbying from both supporters and opponents of the proposal.

Elsewhere in the base metals market, zinc emerged as one of the strongest performers during the first half, rising by over 10% as supply shortages outside China outweighed broader geopolitical concerns.

Nickel prices continued to respond mainly to Indonesian mining policy, climbing on production restrictions before easing as expectations of higher output resurfaced. Tin advanced 27% amid persistent supply tightness, while lead fell 7% due to oversupply and inventory-related trading opportunities.

At the moment, shipping through the Strait of Hormuz is improving but remains inconsistent and difficult to assess. As the remaining geopolitical premium gradually fades, copper’s direction is expected to depend less on Middle East tensions and increasingly on the outcome of the U.S. tariff decision, making Washington, and not the Gulf, the market’s principal focus in the months ahead.

It will therefore not be surprising if entities like Numa Numa Resources Inc. regularly conduct discussions about any news coming from Washington regarding the country’s trade policy on copper imports.

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