(Bloomberg) — Copper resumed its advance along with other industrial metals as tensions eased in the Middle East, boosting risk appetite.
The red metal dipped early on Tuesday before extending gains made in the previous session after Iran and Israel agreed to halt strikes against each other. The flare-up had threatened to derail negotiations to end the wider regional conflict, which has stoked inflation and raised the prospect of higher interest rates that could slow global growth and metals demand.
Sustained strong demand for the industrial metal means prices will rise to $6.50 a pound ($13,000 a ton) in 2027 and an average of $8 a pound ($17,636 a ton) in 2030 and 2031, according to Jefferies analysts, who adopted a previous bullish scenario as their new base case.
Copper rose 0.6% to 13,695 a ton on the London Metal Exchange as of 9:10 a.m. local time, reversing losses of as much as 0.5% during Asian hours. Other base metals were also higher, with tin up 0.7% to $52,650 a ton.
Meanwhile, China’s exports in May were up more than 19% from a year earlier, topping forecasts as booming demand for artificial intelligence hardware offset disruptions from the Iran war. That bodes well for industrial metals demand.
Still, expectations for the US Federal Reserve to raise rates and risks around AI stocks have led some bullish investors to exit, said Zhenting Zhou, a trader with Hangzhou Chenglian Industrial Co.
A three-day selloff in tech stocks highlighted risks to base metals like copper and tin, which are used in electrical equipment, though markets rebounded on Tuesday. Aggregate open interest for copper on the Shanghai Futures Exchange on Monday fell to the lowest since September, according to bourse data.
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