Copper futures dropped below $6.20 per pound on Friday, reaching a one-week low, as escalating tensions between the US and Iran sparked a broad selloff across metals markets. The US carried out multiple strikes against Iran this week, and Tehran responded by targeting American bases in neighboring countries. The heightened geopolitical risk pushed oil prices higher and reinforced concerns about inflation.
Against this backdrop, investors are increasingly worried that central banks may keep interest rates elevated for longer than previously expected, or even raise them further, to contain price pressures.
Nonetheless, copper prices found some support from growing supply risks. A powerful storm in Chile, the world’s largest copper producer, caused extensive power outages and significant infrastructure damage. Adding to the supply strain, Antofagasta reported that its first-half copper output fell 9.5% to 285,000 tonnes, largely due to weaker production at two key mines. BHP also warned that its Chilean copper production is likely to decline next year, while the IEA highlighted tightening supplies of sulphuric acid, a critical input for certain copper mining and processing operations.
