Copper on the LME extended losses on Monday, pressured by inflation concerns tied to the Iran conflict and weaker Chinese data.
Escalating tensions between the US and Iran, along with higher oil prices, heightened fears of prolonged inflation and a tighter policy response. This is weighing on global growth and expectations for industrial demand.
The pullback comes after a strong run, with prices slipping from the recent highs hit just last week amid intensifying macro headwinds. Weaker Chinese data, including softer activity in investment, retail and industrial output, added to concerns about demand, particularly in the manufacturing sector. Broader market volatility and a firmer dollar have further weighed on investor appetite for metals.
Despite the recent softness, copper remains around 8% higher year-to-date. It’s being supported by earlier gains driven by strong positioning, tech-related demand and ongoing supply constraints. Expectations of potential US tariff measures are also providing support, with strong US imports pulling metal away from global markets and tightening availability elsewhere.
Near-term, copper is likely to remain under pressure as macro risks dominate. The downside, though, may be limited by tight supply and responsive Chinese buying on dips.