Copper spikes higher after Trump postpones military strikes on Iranian power plants

LONDON: Copper prices jumped on Monday after U.S. President Donald Trump said he will order the U.S. military to postpone any military strikes against Iranian power plants and energy infrastructure.

Benchmark copper on the London Metal Exchange was up 1.7% at $12,132 a metric ton at 1127 GMT.

It had hit a three-month low at $11,700 a ton after Iran said it would attack Israel’s power plants and those supplying U.S. bases across the Gulf region if Donald Trump carries out his threat to “obliterate” Iran’s power network.

Traders said a relief rally was propelling industrial metal prices higher as was the softer U.S. currency which makes dollar-priced metals cheaper for holders of other currencies.

However, oil prices are still elevated and will hurt global growth as they push up costs for households and businesses, fan inflation fears and dim prospects for central bank interest rate cuts.

“The war, now in its fourth week, has pushed oil and gas prices higher, threatening to hurt economic activity worldwide and fuelling inflation that will likely force central banks to take a more hawkish stance on interest rates,” Britannia Global Markets said in a note.

Also supporting sentiment were signs that demand might be recovering in top consumer China.

Stocks of copper in warehouses monitored by the Shanghai Futures Exchange fell for the first time since December. The Yangshan copper premium, a gauge of China’s appetite for importing copper, has climbed to $48 a ton from $42 on March 6.

Elsewhere focus remains on aluminium - supported by worries about disrupted supplies from the Middle East which accounts for around 9% of global supplies.

However, profit-taking on long positions is weighing on prices of aluminium used in the auto, construction and packaging industries, traders said.

Premiums for nearby aluminium contracts against longer-dated forwards across the maturity curve suggest expectations of severe shortages.

Three-month aluminium retreated 1% to $3,181, zinc gained 0.3% to $3,077, lead was little changed at $1,895, tin slipped 0.6% to $43,015 and nickel ceded 0.3% to $16,985.