Base metals are experiencing a downturn, with copper heading for weekly losses and other metals following suit. This instability is largely attributed to ongoing uncertainty surrounding developments in the Middle East conflict between the US and Iran. The extended ceasefire, unilaterally declared by President Donald Trump, has not led to a return to talks, and the Strait of Hormuz remains largely blocked, further exacerbating market concerns.
Escalating tensions in the Middle East, coupled with expectations of US interest rate hikes, are weighing heavily on the demand outlook for commodities. Metals across the board, from aluminum to zinc, have seen drops. A significant factor was the US forces' strike on Iran following President Trump's accusation that Tehran shot down a US helicopter. Trump's subsequent vow to strike Iran again has intensified the conflict, leading to increased inflation and the prospect of higher interest rates, which could slow global economic growth and metal demand.
Despite the general decline, aluminum has shown volatility. On April 13, 2026, it jumped to a four-year high of $3,607.50 per metric ton on the London Metal Exchange after Trump ordered a blockade of the Strait of Hormuz. However, renewed fighting reversed this trend, with the three-month aluminum contract climbing to $3,132/t on July 8, before upward momentum slowed. Supply chain disruptions, including competition for Canadian aluminum and increased output from Chinese and Indonesian refineries, are also impacting prices. Marine traffic disruptions through the Strait of Hormuz are also affecting the supply of raw materials like alumina and bauxite, which could lead to further price increases if the closure is extended.
Oil prices have also been affected, with Brent crude rising over 4% on July 13, 2026, to $79.17 a barrel, the highest since June 22. This surge follows renewed hostilities between the US and Iran over the Strait of Hormuz. After a brief period of returning to pre-conflict levels following a memorandum of understanding signed on June 17, oil prices are now approximately 9% higher than before the initial US and Israeli strikes on Iran in late February. Analysts anticipate that the per-barrel price of Brent will likely remain in the upper $70s during August and September due to heightened geopolitical uncertainty.
