Middle East Tensions Spark Volatility in Base Metals

The global economy's uncertainty due to the Middle East conflict has kept base metals volatile. The threat of escalating tensions sent Brent crude prices back above $100 a barrel, potentially fueling inflation and higher interest rates.

Metal traders are divided between the geopolitical risks and signs that demand is outpacing supply. Copper, up 10% this year on the London Metal Exchange, has been helped by a significant outflow to the US and some supply pressure in China.

The Trump administration's potential tariffs on copper imports remain a concern. The US Department of Commerce was supposed to provide recommendations on levies over three weeks ago, but no decision has been announced yet. Copper prices currently stand at $13,636 a ton on the London Metal Exchange, with aluminum down 1% and zinc falling 0.5%.