Global commodities markets are entering a new phase of cautious recovery as copper prices climb to multi-week highs, following improved industrial demand in China and persistent geopolitical risks tied to tensions involving Iran and the United States.
Benchmark three-month copper on the London Metal Exchange (LME) rose 0.5 per cent to $12,742.50 per metric tonne on Friday, after touching an intraday high of $12,78, its strongest level in more than three weeks. The metal is now on track to close the week with gains exceeding 3 per cent, extending a rebound that has seen prices rise 9 per cent since late March.
The rally underscores renewed investor confidence in global industrial activity, particularly in China, the world’s largest consumer of base metals. Recent data points to tightening supply conditions within the Chinese market, with copper inventories in warehouses monitored by the Shanghai Futures Exchange declining by 11.5 per cent in the past week alone. Since early March, inventories have dropped by as much as 37 per cent, signalling a steady drawdown driven by stronger consumption.
Further reinforcing the demand narrative, the Yangshan copper premium, a key gauge of appetite for imported copper into China, climbed to $73 per tonne, its highest level since mid-2025. The increase indicates that domestic buyers are willing to pay higher premiums to secure supply, a trend typically associated with tightening market fundamentals and robust downstream activity.
However, the upward momentum in copper prices is being tempered by geopolitical uncertainty, particularly surrounding the fragile ceasefire between the United States and Iran. Market participants remain cautious ahead of scheduled diplomatic negotiations in Islamabad, where any breakdown in talks could reignite tensions and disrupt global trade flows.
Analysts note that the interplay between these opposing forces (improving demand in Asia and geopolitical fragility in the Middle East), is shaping investor sentiment. Ole Hansen, head of commodity strategy at Saxo Bank, observed that while Chinese demand indicators are supportive, the risk of escalation in geopolitical tensions is limiting aggressive bullish positioning in the market.
“There is limited appetite to take strong long positions given the uncertainty surrounding negotiations,” Hansen said, highlighting the cautious stance among institutional investors.
From a technical perspective, copper is approaching a critical resistance level near $12,800 per tonne, a threshold defined by previous price retracements and key moving averages. A sustained break above this level could signal further upside potential, while failure to breach it may trigger consolidation in the near term.
Beyond copper, broader base metals markets are also reacting to evolving supply dynamics. Aluminium prices on the LME rose by 1 per cent to $3,479 per tonne, supported by concerns over supply disruptions linked to the continued closure of the Strait of Hormuz, a strategic shipping route critical to energy and industrial supply chains. The Gulf region accounts for a significant share of global aluminium production, amplifying the impact of any logistical constraints.
Other metals presented a mixed performance. Zinc prices declined by 0.7 per cent to $3,305 per tonne, reflecting softer demand signals, while nickel gained 0.7 per cent to $17,205 per tonne. Tin advanced 0.8 per cent to $48,050 per tonne, and lead traded largely flat at $1,927 per tonne.
