Global commodity markets staged a cautious rebound on Monday as copper prices rose into bullish territory following a de-escalation signal from the United States, offering temporary relief to investors rattled by weeks of geopolitical uncertainty in the Middle East.
Benchmark copper on the London Metal Exchange (LME) rose 1.7 per cent to $12,132 per metric tonne, recovering from a three-month low of $11,700 recorded earlier amid escalating tensions between Iran, Israel, and the United States.
The rally came after U.S. President Donald Trump announced plans to delay potential military strikes targeting Iranian power plants and energy infrastructure; an indication that immediate escalation risks may be easing, at least temporarily.
Market participants described the uptick in copper prices as a “relief rally,” driven not only by the geopolitical pause but also by a softer U.S. dollar, which tends to make dollar-denominated commodities more attractive to holders of other currencies.
Copper, widely regarded as a bellwether for global economic health due to its extensive use in construction, manufacturing, and energy systems, had come under pressure in recent sessions. The earlier decline was triggered by threats from Iran to target Israeli power facilities and U.S.-linked infrastructure in the Gulf, raising fears of a broader regional conflict that could disrupt global supply chains.
The temporary cooling of tensions has helped stabilise sentiment, but analysts warn that volatility remains elevated, with markets highly sensitive to political developments.
Despite the rebound in industrial metals, oil and gas prices remain elevated, reflecting ongoing risks to energy supply routes in the Middle East.
According to analysts at Britannia Global Markets, the conflict, now stretching into its fourth week, has already pushed energy prices higher, with significant implications for global growth.
“The war has increased oil and gas prices, threatening economic activity worldwide and fuelling inflation,” the firm said in a market note, adding that central banks may be forced to maintain a more hawkish stance on interest rates as a result.
Elevated energy costs typically translate into higher input costs for businesses and reduced disposable income for households, thereby dampening economic momentum. For central banks, persistent inflationary pressure complicates the path toward monetary easing, particularly in advanced economies already grappling with price stability concerns.
Beyond geopolitics, signs of recovering demand from China, the world’s largest consumer of industrial metals also provided a tailwind for copper prices.
Data from the Shanghai Futures Exchange showed that copper inventories declined for the first time since December, indicating tightening supply conditions or improving consumption.
Further reinforcing this trend, the Yangshan copper premium, a key indicator of China’s appetite for imported copper, rose to $48 per tonne from $42 earlier in March. The increase points to stronger import demand, a positive signal for global producers and traders.
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