Metals Prices Plummet Amid Trump's Reiterated Threats Against Iran's Energy Infrastructure

Global Markets Reel as US-Iran Tension Escalates

The ongoing conflict between the United States and Iran has taken a toll on global markets, with copper prices plummeting by 1.2% to $12,288 a ton on the London Metal Exchange by 1:27 p.m. Shanghai time. This decline comes in the wake of US President Donald Trump's threat to attack Iran's civilian infrastructure should negotiations fail to end the month-long war.

In a primetime TV address, Trump reiterated that the US would strike Iran "extremely hard" over the next two to three weeks, with the possibility of targeting "each and every one" of the country's power plants. This escalation has sent ripples throughout the metals market, with aluminum and zinc also experiencing significant drops. Oil futures, on the other hand, surged in response to the heightened tensions.

The global economy is facing a growing prospect of an oil shock, which could have devastating consequences for demand. Metals markets have been shaken by supply disruptions from the Middle East, and copper's decline in March was its biggest monthly drop since 2022.

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Table: Metal Prices on Thursday

The disruptions to the Middle East's aluminum industry have also taken a toll on the market. Emirates Global Aluminium, the region's top producer of aluminum, reported that Iranian missiles and drones had forced one of its smelters to halt output, causing the metal's price to notched its highest close in four years on Wednesday. However, even aluminum was lower on Thursday.

According to Kelvin Wong, senior analyst at Oanda, the global central bankers' reversal from their liquidity-easing cycle poses a significant threat to the demand for base metals, including copper. Oil prices are the primary driver of markets, and the upward trend for crude is likely to remain intact as long as there is no clarity on flows through the Strait of Hormuz.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

In his speech on Wednesday, Trump urged allies who rely on Middle Eastern energy to resolve the near-closure of the strategic waterway, the Strait of Hormuz, through which a fifth of the world's oil and liquefied natural gas typically passed before the war.