According to APP, copper prices continued to fall, hitting their lowest point in more than three months, as the Middle East conflict dampened investor risk appetite and fueled concerns about global inflation and economic growth. The latest London Metal Exchange data showed that LME copper fell 1.8% on Monday, settling at $11,929.50 per tonne, following a sharp 6.7% drop last week (the largest weekly decline this year), bringing prices to their lowest level since December.

The four-week-long conflict with Iran has led to repeated attacks on energy facilities in the Persian Gulf, causing a sharp rise in oil and gas prices and directly pushing up global imported inflation expectations. Brent crude and European natural gas futures have both seen significant increases, with markets concerned that supply chain disruptions will damage manufacturing activity, thereby suppressing copper demand. As a core raw material for electricity, construction, new energy vehicles, and electronics, copper prices are highly sensitive to global economic growth; once growth expectations are revised downwards, investors accelerate the sale of risky assets.

US President Trump recently stated regarding the conflict that "the US is not considering deploying ground troops to Iran," but the continued threat to energy infrastructure remains unsettling in the market. The complex inflation path has further strengthened the dollar and fueled risk aversion. Central banks worldwide are thus facing a dilemma: on the one hand, rising energy costs are pushing up prices, while on the other hand, slowing economic activity is constraining growth. This has led the market to price in a more aggressive stance from central banks on interest rate policies, potentially delaying rate cuts or even considering additional tightening.

Comparison of price changes of major commodities

This round of adjustments exposed the copper market's vulnerability to geopolitical events. High inventories coupled with a strong US dollar environment further amplified the decline, while the slowdown in manufacturing procurement in major Asian countries, the world's largest copper consumer, will create a negative feedback loop. In the short term, copper prices may continue to test lower support levels; if the conflict escalates and leads to further damage to energy facilities, inflation expectations will worsen, and a hawkish stance from central banks may become a new factor suppressing copper prices.

Editor's Summary : Objectively speaking, the energy price shock triggered by the Iranian conflict has been transmitted to the industrial metals market through both inflation and growth channels, with copper prices hitting a three-month low directly reflecting this chain reaction. Although short-term risk aversion dominates, a rebound in prices could still be driven by a recovery in demand coupled with supply constraints once geopolitical tensions ease. Investors need to be wary of the uncertainty surrounding central bank policy shifts, and diversifying their portfolios with commodities and defensive assets is a necessary choice at present.