Copper and other industrial metals recently experienced losses, with copper falling as much as 2.1% on the London Metal Exchange. This downturn was largely attributed to a strengthening dollar, which gained nearly 1% this week, and the Federal Reserve's hawkish stance, leading to concerns about sustained high interest rates. These factors collectively dampened the demand outlook for risk assets and commodities priced in the US dollar.
However, earlier in June, copper prices saw an uptick following progress in peace talks between Iran and the US. On June 22, Iran reported "major progress" in negotiations, boosting hopes for renewed traffic through the Strait of Hormuz and easing inflation pressures. An interim agreement between the US and Iran on June 15 further solidified optimism for global growth, although this specifically caused aluminum prices to slump by 4.4% to $3,379.50 per metric ton as metal shipments were set to resume through the strait, increasing supply.
Looking back to February 2026, copper prices rallied significantly due to tariff fears and a weakening US dollar. Prices climbed by 2.8% on February 24 to reach $13,228 per metric ton on the London Metal Exchange, exceeding $6 per pound in the US. The Shanghai Metals Market's SMM 1 copper cathode also rose by $119.77 to $13,104.73 per metric ton. This rally was influenced by the complex interplay of a Supreme Court decision striking down certain US tariffs, followed by President Trump reinstating new tariffs.
The overall market for copper is also being influenced by long-term fundamental drivers. Analysts from institutions like UBS, J.P. Morgan, and Citi are bullish, raising price forecasts. UBS projects copper prices of $4.37 and $4.80 per pound for this year and next, respectively, while J.P. Morgan anticipates an average of approximately $12,500 per ton in 2026, with a full-year target above $13,000. Citi expects average prices to reach $15,000 per ton by year-end. These optimistic outlooks are supported by demand from AI infrastructure expansion, the green energy transition, tight global supply due to declining ore grades and production cuts from major miners like Codelco and Freeport-McMoRan, and potential US interest rate cuts and a weaker dollar.
