(Bloomberg) — Copper rose along with some other industrial metals as tensions eased in the Middle East, boosting risk appetite.
The advance added to copper’s gains made on Monday after Iran and Israel agreed to halt strikes against each other, while US President Donald Trump renewed his claims of momentum toward ending the conflict. The recent 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.
Copper climbed as much as 1.2% on Tuesday, getting a further boost after Bloomberg reported that China is preparing to spend around 2 trillion yuan ($295 billion) over the next five years on building data centers across the country. Global spending on data-center infrastructure has become a key pillar in the bullish demand outlook for copper over recent months.
Sustained strong demand for the 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 1% to $13,755.50 a ton by 12:27 p.m. local time on the London Metal Exchange, reversing earlier losses of as much as 0.5%. Other base metals were mixed, with zinc and tin climbing, while aluminum dropped 0.8% after a surge in Chinese exports.
China’s overall 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 recent selloff in tech stocks highlighted risks to base metals like copper and tin, which are used in electrical equipment, though markets rose on Tuesday. Aggregate open interest for copper on the Shanghai Futures Exchange has fallen to the lowest since September, according to bourse data.
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