LONDON: Copper prices extended gains on Wednesday, touching their highest in nearly two weeks, on hopes that the US and Iran are close to a deal to end the war in the Middle East.
Benchmark three-month copper on the London Metal Exchange rose 2.1percent to USD13,410 a metric ton in official open-outcry trading for a third straight session of gains. It earlier hit its highest since April 23 at USD13,462.
The United States and Iran are closing in on an agreement on a one-page memorandum of understanding to end the war in the Gulf, sources said.
“Copper is very strong after that headline about Iran and the US agreeing to a one-page memo,” said Robert Montefusco at broker Sucden Financial. “We’re also seeing oil coming off and then the other markets going up again.”
Stocks jumped and oil benchmark Brent crude plunged 10percent below USD100 a barrel for the first time since April 22 after the report about a one-page memorandum to end the war. The most traded copper contract on the Shanghai Futures Exchange climbed 1.6percent to 102,660 yuan (USD15,029.98) a ton.
Chinese markets resumed trading on Wednesday after May Day holidays. Montefusco said the metals markets also received a lift from data showing services activity in top metals consumer China expanded at a faster pace in April, helped by stronger growth in new business. LME aluminium prices shed 1.3percent in official activity to USD3,544.50 a ton on hopes of easing Middle East supply disruptions.
The region accounts for about 9 percent of global production of the metal. Analysts at ANZ expect aluminium prices to remain skewed to the upside, trading above USD3,400 a ton.
“If the Strait of Hormuz reopens, prices may briefly dip, but renewed restocking by manufacturers should limit any significant downside,” they said in a note.
Among other metals, LME nickel was flat at USD 19,640 a ton after touching USD 20,000 for its highest since May 2024. Lead rose 0.8percent to USD 1,987.50 and zinc climbed 1.4percent to USD3,419 while tin jumped by 6percent to USD52,695.
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