Copper, Aluminum Prices Rise on Global Demand, War Outlook

Copper climbed toward $14,000 a ton and aluminum advanced to its highest in more than four years as the unresolved conflict in the Middle East and optimism over demand powered gains.

Base metals have made a strong start to June, fueled by bets on tighter global supply. Aluminum availability is under pressure as the U.S. struggles to resolve its war with Iran, while copper traders are bracing for a crunch tariff decision by the Trump administration. 

Prices are also benefiting from bets on assets linked to artificial intelligence and the energy transition. Tin — used in soldering for electronics — jumped as much as 3.7% to $58,750 a ton to trade near a record high.

“Metals prices are generally in an upswing, driven by supply disruptions for some commodities due to the Middle East conflict and strong structural demand,” HSBC Holdings Plc analysts wrote in a note. Commodities were facing a “super-squeeze” with the Strait of Hormuz still blocked, they wrote.

The gains come after a flurry of bullish calls by some analysts. Goldman Sachs Group Inc. raised its end-of-year copper forecasts by more than 10% in a note earlier this week, while Citigroup Inc. last month said aluminum was facing its most bullish supply-demand conditions in at least half a century.

In a sign of tighter markets, cash aluminum contracts were as much as $116.50 a ton more expensive than three-month futures on June 2, the biggest premium since 2007.

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Investors are still monitoring the latest developments in the Middle East. President Donald Trump is still optimistic the U.S. can reach an interim peace deal with Iran soon, after the Islamic Republic threatened to suspend talks because of Israel’s escalating attacks in Lebanon.

The ongoing war adds to question marks over the future of aluminum supply from the region, which accounted for about a tenth of global output before the conflict began. Some copper output is also at risk of slowing if flows of sulphuric acid from the Middle East continue to be squeezed.

Aluminum was up 1.3% at $3,765 a ton by 12:17 p.m. on the London Metal Exchange, marking an advance of more than 25% this year. Copper rose 0.9% to $13,962 a ton.