FX.co ★ Copper Falls on US-Iran Tensions

Copper futures fell below $6.10 per pound on Monday, retreating from more than two‑month highs as escalating US–Iran tensions fueled concerns about inflation and global growth, potentially dampening demand for industrial metals. The US seized an Iranian-flagged cargo vessel in the Gulf of Oman, while Tehran reversed plans to reopen the Strait of Hormuz and announced it would not participate in a second round of negotiations.

The prospect of prolonged disruption in this strategic shipping lane has amplified the energy shock, heightening inflation risks and threatening global economic growth, with knock-on effects for manufacturing activity and broader industrial commodity demand.

Despite these near-term trade headwinds, copper remains underpinned by structural drivers such as global electrification, the expansion of artificial intelligence infrastructure, and steady consumption from power grid development and construction. On the supply side, output continues to be constrained by mining disruptions, years of underinvestment, and lengthy lead times for bringing new projects online.