Copper rises as Trump says Iran deal to be signed soon
Copper analysis
Following two days of hostilities and an escalation in rhetoric, President Trump called off additional military strikes, saying that a "great settlement" with Iran has been achieved and expecting to "have a signing soon" [1]. A resolution of the Middle East conflict and the reopening of the Strait of Hormuz would remove a crucial overhang over global economic activity and trade, alleviating a notable headwind for consumption of the critical mineral. The International Copper Study Group (ICSG) forecasts another solid year, seeing a 1.6% increase in refined copper usage in 2026. [2]
Copper continues to benefit from structural demand drivers due to its use in critical industries. It is indispensable to the AI boom as hyperscalers keep pouring vast capital into the data centre buildout, driving demand for semiconductors. Alphabet plans to roughly double its capital expenditures this year, while Nvidia posted another blockbuster report last month and expects sales to accelerate further this quarter. [3]
The non-ferrous metal is also a vital component in the clean energy transition, supported by the spike in energy prices. Solar PV was the largest contributor to 2025 energy demand growth according to the IEA and global renewable capacity additions rose to a record 800 gigawatts [4]. Electric car sales rose more than 20% last year and the agency expects faster growth of 28% this year. [5]
Additionally, copper is critical for the defence industry as security budgets rise amid persistent geopolitical uncertainty. The United States is raising its budget to new records and President Trump has called for a further increase to $1.5 trillion [6], while NATO has committed to raising investment to 5% of GDP by 2035. [7]
Copper rises following President Trump's remarks, returning above the EMA200 and reaffirming the bullish bias supported by its role in AI, clean energy and defence, keeping it on track for new all-time highs. However, risks still loom that could renew pressure on the non-ferrous metal and test the upside momentum.
President Trump spoke of agreement on a memorandum of understanding, which means further negotiations may be needed for a lasting peace. Moreover, there have been many false dawns before and Iranian media report that Tehran has not actually agreed to the MoU yet. [8]
Furthermore, the prolonged energy shock is pushing inflation higher and central banks toward a more hawkish stance. The Reserve Bank of Australia has hiked rates three times this year, the European Central Bank raised rates for the first time in nearly three years yesterday [9], the Bank of Japan is gearing up for additional tightening next week and markets are pricing in a Fed hike this year.
This shift toward monetary tightening could exacerbate headwinds on key global economies, with the World Bank forecasting a "meager" 2.5% GDP rise in 2026 [10], sustaining risks for global copper consumption. Supply-demand dynamics are more mixed than they appear, as the ICSG expects another surplus this year while the Middle East conflict has caused it to slash its demand growth forecast.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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