US copper futures traded above $6.30 per pound, pausing their pullback from the record high of $6.60 reached on June 2, as mounting supply risks from the Middle East conflict clashed with macroeconomic headwinds created by the war. The first exchange of strikes between Iran and Israel since their fragile ceasefire has undercut hopes for a broader agreement between Tehran and Washington.
The protracted conflict has disrupted exports of sulfur and sulfuric acid from major GCC producers, prompting China to suspend its own exports of these inputs and triggering shortages in Chile, one of the world’s leading copper producers. Tight sulfuric acid supply is constraining copper refining capacity and complicating Codelco’s efforts to cut operating costs.
At the same time, the war’s drag on manufacturers has tempered copper demand and limited further price gains. Upside has also been capped by expectations of a hawkish Federal Reserve after strong US jobs data, which bolstered the dollar and weighed on dollar-denominated commodities.
