This week, industrial metals have faced fluctuations as inflation fears intensified, affecting global bond markets. Copper futures for August delivery fell by 1.3% on Tuesday but recovered slightly to $13,477 per ton on Wednesday. Analysts view copper as a key indicator of economic health, and its price movements reflect broader market volatility influenced by corporate earnings and rising U.S.
Treasury yields. Macquarie analysts highlighted that demand for zinc is particularly vulnerable due to its heavy reliance on the construction sector, which could be impacted by economic downturns. In aluminum, supply constraints are exacerbated by weak demand in Europe and North America, with geopolitical tensions affecting exports from the Gulf region.
Wood Mackenzie noted that the ongoing conflict in the Middle East poses risks to aluminum supply, which could hinder price recovery. Copper's price dynamics are characterized by a tug-of-war between strong demand driven by energy transition and fears of rising interest rates.
Despite recent peaks near $14,500 per ton, prices are currently consolidating around $13,500, with volatility driven by contrasting bond market conditions in the U.S. and China.
Supply disruptions from major mines further complicate the outlook, with the market expected to remain volatile within a range of $13,200 to $13,800 per ton until there is stabilization in bond yields and a recovery in Chinese industrial activity