ING’s Ewa Manthey and Warren Patterson note that industrial metals, including Copper, rallied on Wednesday as progress towards a US-Iran deal improved risk appetite and eased fears of an energy shock, before paring gains on Thursday. They highlight ongoing supply risks via the Strait of Hormuz and stress that Copper will remain driven by geopolitical headlines versus underlying demand concerns.

Copper tracks geopolitics and demand worries

"Industrial metals rallied during Wednesday’s trading session as signs of progress towards a US-Iran deal improved risk appetite and eased fears of a broader energy shock."

"The move reflects reduced concern that higher energy prices will weigh on global manufacturing activity."

"Traffic through the Strait of Hormuz remains disrupted, while Middle East-related supply issues continue to affect parts of the metals chain, including aluminium flows and sulphuric acid availability for copper production."

"Copper is likely to stay driven by the balance between geopolitical headlines and underlying demand concerns."

"A sustained de-escalation would support risk appetite and ease cost pressures, but any renewed disruption around Hormuz would keep supply risks in focus."

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