London Metal Exchange (LME) benchmark three-month copper prices declined on Monday, dropping 0.64% as escalating military conflict between the United States and Iran disrupted global risk sentiment.
The sell-off in the industrial metal was driven by a combination of rising energy costs and a strengthening US dollar, which typically dampens demand for dollar-denominated commodities.
The price weakness in copper stands in stark contrast to the broader energy complex, where Brent crude and WTI prices surged sharply.
The divergence highlights the immediate market reaction to Tehran’s decision to close the Strait of Hormuz, a critical chokepoint for global energy supplies.
While energy markets priced in supply disruption, industrial metals faced headwinds from the prospect of higher input costs and reduced economic activity.
The geopolitical flare-up has reignited fears of stagflationary pressures.