Copper rises on Hormuz supply disruption fears
XLB•Hormuz tensions and sulphur supply concerns weigh on metals
U.S. President Donald Trump and Iran have announced competing blockades of the Strait of Hormuz. The U.S. has renewed its strikes on Iran, and tankers have come under attack in the vital waterway.
The escalation is a "double-edged sword" for copper, Chinese broker Everbright Futures said, as supply fears support prices but growth risks hurt demand.
Particularly, supply chains could be squeezed by further sulphur supply shortages, the broker said.
The Middle East accounts for about a quarter of global sulphur supply, making sulphuric acid a key risk for copper and nickel supply chains.
Sulphuric acid is used in copper leaching, a process that extracts metal from ore, and tighter supply could raise costs even as weaker growth clouds demand.
Copper rises as Middle East conflict boosts supply-chain risk premiums
Copper prices rose on Tuesday as the latest escalation in the Middle East conflict revived supply-chain risk premiums.
Benchmark three-month copper CMCU3 on the London Metal Exchange climbed 0.2% to $13,568.5 a metric ton by 0700 GMT. The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 rose 1.06% to 104,390 yuan per ton.
Higher energy prices lift aluminium and nickel; other base metals mixed
Oil prices jumped to their highest level in four weeks but remained below their peaks at the height of the conflict.
Higher energy prices also support energy-intensive metals such as aluminium and nickel, analysts at Sucden Financial said.
On the LME, aluminium CMAL3 increased 0.62%, while on the SHFE SAFcv1 it rose 1.35%.
