Copper prices hit their highest level in over a week, reaching $13,796.50 per ton.
The framework agreement between the US and Iran helped ease concerns about energy inflation, pushed the dollar down to a 10-day low, and boosted prices of base metals across the board.
On June 15th, copper prices surged to their highest level in over a week. The main driving force came from the agreement between the US and Iran, which eased concerns about energy inflation and pushed the US dollar lower, creating favorable conditions for demand for the base metal.
Copper price movements on major exchanges
At the close of trading in Asia, the price of three-month copper futures on the London Metal Exchange (LME) rose 0.72% (equivalent to nearly $99), closing at $13,796.50 per ton. During the session, the price of the metal briefly touched $13,893.50 per ton, its highest level since June 5th.
In the Chinese market, on the Shanghai Futures Exchange (SHFE), the most actively traded copper contract also recorded a 1.27% increase, closing at 105,590 CNY/tonne (approximately $15,625.14/tonne). Earlier, the price of copper on this exchange had reached 106,000 CNY/tonne.
The impact of the US-Iran agreement and currency fluctuations.
The market reacted positively to news that US and Iranian officials had reached a framework agreement to end the conflict. This agreement included lifting the blockade of seaports and reopening the Strait of Hormuz, a vital global oil and gas shipping route. This event eased concerns about disruptions to global energy supplies, causing Brent crude prices to fall by more than 4%.
In addition, the USD Index retreated to its lowest level in 10 days. The weakening USD makes metals priced in the greenback cheaper for investors holding other currencies, thereby stimulating strong buying demand.
According to analysis from Jinrui Futures (China), this is the biggest step forward in months of negotiations, significantly reducing geopolitical pressure on commodity markets. However, the firm also advises investors to closely monitor the actual implementation of the agreement in the coming period.
The focus is on the Fed's policy.
In addition to geopolitical factors, investors are focusing their attention on the Federal Reserve's policy meeting this week. This is the first meeting chaired by Fed Chairman Kevin Warsh.
Markets anticipate the Fed will keep interest rates unchanged, but statements on the inflation outlook and future interest rate path will be key factors influencing investor sentiment. Recent data shows that consumer confidence in the US has improved somewhat due to lower gasoline prices, but inflation expectations remain high, forcing the Fed to maintain a cautious stance.
Trends in other base metals
The base metals market saw a predominantly positive trend in the last trading session:
- In London (LME):Tin prices rose the most, at 2.83%; nickel increased by 0.59%; lead by 0.48%; and zinc by 0.27%. Aluminum, however, fell by 0.86%.
- In Shanghai (SHFE):Tin led the gains with a 4.74% increase; zinc rose 2.33%; nickel increased 1.52%; and lead gained 1.03%. Aluminum prices remained stable compared to the previous session.
