ING’s Warren Patterson and Ewa Manthey note Copper has edged higher, with LME prices back above $13,000/t as markets gauge the durability of the US-Iran ceasefire. They argue a prolonged Strait of Hormuz closure would raise energy costs and hurt manufacturing demand, leaving Copper headline-driven and needing stronger physical demand or inventory drawdowns for a sustained move higher.

Headline-driven trade and demand risks

"Copper edged higher as markets assessed whether the US-Iran ceasefire can hold. LME copper recovered on Tuesday afternoon from earlier losses in the session to trade back above $13,000/t. It’s supported by improved risk sentiment but capped by still-elevated exchange inventories, now close to the highest level since 2013."

"The main risk for metals remains a prolonged closure of the Strait of Hormuz. That would lift energy costs, add inflation pressure and weigh on manufacturing demand, limiting upside for industrial metals. Copper is likely to stay headline-driven, with stronger physical demand or inventory drawdowns needed for a more sustained move higher."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)