Geopolitics and Trade Policies Drive Metal Prices Volatility

Industrial metal prices for copper, steel, and aluminum continue to be sensitive to geopolitical tensions, industrial demand, and shifts in government policy. As a result, prices remain volatile.

Copper prices are particularly affected by the Middle East conflict, where sulfur and sulfuric acid used in extraction processes are sourced from. Gregory Shearer of JPMorgan notes that copper supply is constrained due to mine production weakness, supporting demand trends linked to electrification and data center capital expenditure.

Shearer also points out that tariff uncertainty between the US and China is contributing to higher copper prices, as both countries compete for imports. The US Commerce Department's Section 232 tariff review may lead to trade policy changes affecting copper exports.

Aluminum prices are influenced by the conflict in the Middle East, which has disrupted supply through the Strait of Hormuz. Shearer expects a substantial deficit in primary aluminum this year, driven partly by China's production capacity ceiling of 45 million metric tons. Chinese restrictions on aluminum exports could further increase prices.

Steel prices vary across regions due to global conflicts and trade policies. The US has exempted materials used in steel production from Section 301 tariffs, while the EU's tariff-rate quota system supports higher steel prices by preventing cheap imports.