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Base metals swing as Middle East escalation weighs on sentiment

Copper was up around 10% for the year, but traders stayed cautious after Yemen attacks disrupted shipping in the Red Sea.

Reported · Written up by our desk · Industrial Metals

Base metals traded with mixed momentum at week end, as escalation fears tied to the Middle East and broader concerns about global economic turbulence kept investors from leaning too far into the upside, according to LiveMint Markets, citing Bloomberg.

Copper, aluminum and zinc were all set for weekly gains, but price action has been cautious in recent days after Iran-backed Houthi rebels attacked vessels in the Red Sea. The widening conflict at one point pushed Brent crude above $100 a barrel, raising the prospect of firmer inflation and higher interest rates.

A Fitch Solutions unit, BMI, said ongoing military skirmishes have kept the metals complex relatively weak in July, reducing expectations for near-term rate cuts while increasing risks of a stronger US dollar and higher bond yields. Still, traders are balancing that geopolitical uncertainty against signs that demand is running ahead of supply, with copper up about 10% this year on the London Metal Exchange and having traded near $14,000 a ton earlier.

In the market detail, copper was 0.3% higher at $13,636 a ton at 1:20 p.m. local time, while aluminum fell 1% and zinc was down 0.5%. For copper specifically, the market has been watching the possibility of import levies from the Trump administration, with the US Department of Commerce expected to provide new recommendations more than three weeks ago but no decision disclosed so far.

Latest closeCopper $6.340 ▲0.6%|WTI crude $90.47 ▼1.9%|Brent $98.38 ▼2.3%

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