Copper, base metals slide as U.S.-Iran strikes rattle markets

Copper fell sharply on the LME and Shanghai Futures Exchange as U.S. strikes on Iran escalated, dragging aluminum, nickel, zinc, and tin lower.reuters
May U.S. headline inflation hit 4.2% annually — a three-year high driven by surging energy costs — though core CPI came in softer than expected, according to the BLS.cnbc
Iran announced closure of the Strait of Hormuz after the strikes, adding uncertainty to global trade and commodity flows, according to Al Jazeera.aljazeera

Copper and Base Metals Slide as U.S. Strikes on Iran Rattle Industrial Commodities

Copper fell to its lowest level in weeks on Wednesday as a fresh round of U.S. military strikes on Iran intensified fears of prolonged conflict in the Middle East and dampened the demand outlook for industrial metals. The decline came even as softer-than-expected U.S. core inflation data offered a partial reprieve later in the session.

Broad Selloff Across Base Metals

Copper on the London Metal Exchange dropped alongside aluminum, nickel, zinc, lead, and tin as traders weighed the economic risks of an escalating war between the United States and Iran. According to Trading Economics, copper fell 2.28% on June 10, settling at $6.16 per pound. Aluminum declined more than 1%, while nickel and zinc also posted losses on both the LME and Shanghai Futures Exchange.tradingeconomics

The selling was triggered after the U.S. military launched strikes against multiple targets in Iran on Tuesday evening, which U.S. Central Command described as a response to “Iran’s unwarranted and continued aggression” following the downing of a U.S. Apache helicopter near the Strait of Hormuz. On Wednesday, further strikes followed, with President Trump warning that attacks would resume if Iran failed to make concessions in negotiations.nytimes

Inflation Data Offers Limited Relief

Metals pared some losses after the Bureau of Labor Statistics reported that May core CPI — which strips out food and energy — rose just 0.2% month over month, below the 0.3% economists had expected. However, headline inflation accelerated to 4.2% annually, the fastest pace in more than three years, driven largely by surging energy prices tied to the Middle East conflict.cnbc

The mixed inflation picture has left traders uncertain about Federal Reserve policy. Strong U.S. employment data from the prior week had already shifted expectations toward a possible rate hike later this year, a scenario that tends to weigh on growth-sensitive commodities like copper.mining

War Premium Reshapes Commodity Landscape

The selloff underscored how the U.S.-Iran conflict has reshaped commodity markets in 2026. While energy prices have soared — motor fuel costs rose 41% year-over-year in May — industrial metals have faced pressure from the prospect of slower global growth and tighter monetary policy. Iran’s announcement of the closure of the Strait of Hormuz following the latest strikes added another layer of uncertainty for global trade flows.aljazeera

“The metals market is focusing on tighter global liquidity following robust U.S. employment data last week, which is bearish for risk assets from gold and silver to industrial materials,” Li Xuezhi, research head at Chaos Ternary Futures Co., told Bloomberg.northernminer