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ING analysts Warren Patterson and Ewa Manthey report that copper prices on the London Metal Exchange (LME) are extending losses amid macroeconomic headwinds. Key factors include inflation concerns tied to the Iran conflict, weaker-than-expected Chinese economic data, and a stronger U.S. Dollar (USD), which collectively dampen industrial demand expectations. The USD's recent strength against major currencies has pressured base metals like copper, while geopolitical tensions in the Middle East add uncertainty to global supply chains.
For traders, this development highlights the sensitivity of industrial commodities to macroeconomic shifts. A stronger USD typically reduces demand for non-USD assets, while weaker Chinese manufacturing data signals reduced demand for raw materials. Additionally, the Iran conflict's potential to disrupt oil and metal supply routes adds volatility. Traders should monitor upcoming U.S. inflation data and central bank policy cues for further directional clues.
The bearish momentum in copper could test key support levels at $8,000/tonne, with a break below this threshold raising risks of a deeper correction. Gulf investors with exposure to industrial metals or energy-linked assets should watch for spillover effects into regional markets. Key events to track include China's next PMI report and the Federal Reserve's stance on interest rates.
