Global base metals markets closed the week on a mixed note, as geopolitical uncertainty surrounding the Iran conflict continued to weigh on sentiment, leaving investors cautious despite pockets of supportive economic data from China.
Benchmark three-month copper on the London Metal Exchange edged down 0.1 per cent to $12,132 per metric tonne. Aluminium, meanwhile, declined more severely, with LME prices falling 1 per cent to $3,235.50 per tonne after briefly touching multi-week highs in the previous session.
The muted performance comes as markets digest ongoing tensions in the Middle East, where uncertainty over a potential resolution to the Iran conflict continues to dampen risk appetite. U.S. President Donald Trump’s decision to extend a deadline for potential strikes on Iran’s energy infrastructure has done little to reassure investors, with scepticism mounting over the likelihood of a near-term diplomatic breakthrough.
Copper, often viewed as a barometer of global economic health due to its extensive use in construction and power infrastructure, has declined about 9 per cent since the outbreak of hostilities in late February. The drop reflects growing concerns that prolonged geopolitical instability could undermine industrial activity, disrupt supply chains, and intensify inflationary pressures globally.
Analysts at Macquarie Group said the market remains fundamentally weak, with prices increasingly driven by macroeconomic headlines rather than underlying supply-demand dynamics.
“Prices lack fundamental support and are expected to remain volatile, dominated by macro news and investor flows,” the bank noted in a research update. It added that while a resolution to the conflict could trigger a short-term rebound, the broader outlook remains constrained by rising inventories and expectations of sustained surpluses.
Global copper supply conditions continue to weigh on sentiment. Visible stocks have risen significantly since the start of the year, with more than one million tonnes added to inventories, raising the risk of a price correction even if geopolitical tensions ease.
Still, there are signs of resilience from China, the world’s largest consumer of industrial metals. Fresh data showing a 15.2 per cent increase in industrial profits in the first two months of 2026 provided some support to sentiment.
This was reinforced by tightening domestic supply indicators. Copper inventories tracked by the Shanghai Futures Exchange declined 12.6 per cent during the week to 359,135 tonnes, while the Yangshan copper premium hovered near a nine-month high at $68 per tonne.
In contrast, aluminium markets reflected growing concerns about supply disruptions. Producers in the Gulf region, which account for 9 per cent of global output, face potential export constraints amid escalating regional tensions. This has pushed the premium on spot aluminium contracts on the LME to $59 per tonne, its highest level since 2007.
Other base metals traded with modest movements. Zinc and lead posted slight gains of 0.1 per cent, while tin rose 2.1 per cent, supported by tighter supply dynamics. Nickel, however, slipped 0.2 per cent, reflecting ongoing uncertainty in stainless steel demand.
