Copper steadied near its highest close on record after US President Donald Trump dismissed Iran’s proposals for a peace deal and said the ceasefire with Tehran was on “life support”.
The US leader’s latest comments underscore the deadlock in the Middle East conflict that’s in its 10th week and threatened widespread economic disruption. Still, metals have posted strong gains in the past month and the decline comes after a big advance on Monday.
Copper was little changed at $13,938 a ton by 11:47 a.m. Shanghai time, after earlier losing as much as 0.8%. The metal rose 2.7% on Monday. Aluminum was down 0.7% and zinc — which closed at a three-year high — was steady.
Metals have largely shrugged off deepening uncertainty about the impasse in th Strait of Hormuz, where blockades imposed by Iran and the US have cut off oil and gas flows and driven up global energy costs. Strong demand from China has helped, and analysts from Citigroup Inc. to Jefferies have argued copper will prove relatively resilient.
“The extent of Chinese willingness to absorb higher prices remains a key question with recent data indicating strong fundamental demand,” RBC Capital Markets analyst Sam Crittenden said in an emailed note.
Monday’s rallies across copper and zinc, as well as silver, were partly driven by a sudden flurry of speculation about fuel availability in Peru, a major mining hub. The government in Lima has announced a $2 billion package to shore up state-owned refinery PetroPeru, but there was widespread discussion in China about the threat to miners that depend on diesel supplies.
The PetroPeru news “is just a financial arrangement and has not had any effect on mines,” said Zijie Wu, an analyst at Jinrui Futures Co. “Peru’s issue is not that they cannot get oil but they don’t have money to buy oil, so as the Middle East crisis develops, it can still cause some supply-side concerns.”
Peru is a major producer of silver, and spot prices for the precious metal climbed 7% on Monday to close at $86.057 an ounce.
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