• Prices hit a three-month low after a steep 6.7% weekly drop, as the US–Iran-linked Middle East conflict dampens global risk appetite and signals weakening industrial demand.
• Surging oil and gas prices from the conflict are raising production costs while slowing economic activity creating a dangerous mix of high inflation and low growth that could keep interest rates elevated
• While Chinese buyers are stepping in at lower prices short-term macro pressures dominate despite strong long-term fundamentals driven by electrification, AI, and a projected copper supply deficit

Harare - Copper has extended its bruising decline to the lowest level in more than three months , as the deepening war in the Middle East drained risk appetite from financial markets and sharpened worries about a toxic mix of higher inflation and slower global growth.

The red metal  affectionately known in trading circles as “Dr. Copper” for its long track record as a reliable gauge of the world economy  dropped as much as 1.8% on the London Metal Exchange.

That slide followed a punishing 6.7% plunge last week, the steepest weekly loss since April 2025. The metal had powered higher through much of last year on tight supplies and explosive demand from electric vehicles, renewable-energy projects, power grids, and the artificial-intelligence boom’s data centres.

The conflict, now in its fourth week, has propelled oil and natural-gas prices sharply higher. Those energy shocks threaten to throttle industrial activity worldwide while simultaneously feeding inflation that could force central banks to abandon rate-cut plans or even turn more hawkish.

Even as international sentiment sours, signs of resilience are emerging where it matters most, China, which accounts for roughly half of global copper consumption. When prices on the Shanghai Futures Exchange dipped below the psychologically important 100,000-yuan (US$14,485) per tonne level, domestic fabricators responded with “significant” purchases.

‘’Many of these buyers most likely already have order books filled through next month and that pocket of real-economy demand should allow Shanghai copper prices to hold up better than their more volatile London counterparts in the weeks ahead,’’  Zhejiang Hailiang said.

Benchmark copper was down 0.7% at US$11,840 a tonne. On the SHFE, the contract fell 2% to 92,930 yuan a tonne. Among other industrial metals, aluminium slipped 0.4% to US$3,201.50 a tonne.

Copper’s unique conductivity makes it irreplaceable in everything from electric motors and charging stations to wind turbines, solar farms, and the massive cabling required for AI-driven data centres. .

The International Energy Agency (IEA) projects a 30% supply gap by 2035, growing to 50% by 2040, requiring an estimated US$122 billion in investment to close the gap.

For years, there has been a projection of a looming structural deficit, mine supply is struggling to keep pace with the clean-energy transition and electrification of transport.

That bullish long-term story helped propel prices to record territory in late 2025. But near-term macro forces have now taken over. Soaring energy costs raise both mining and smelting expenses while crimping demand from factories and construction sites.

Ample inventories sitting in LME warehouses have provided a buffer, preventing an outright supply crunch from cushioning the fall. The result is classic stagflation risk higher prices for everything from fuel to finished goods at precisely the moment when growth is slowing.

Central bankers in Washington, Frankfurt, and Beijing will be watching closely any hint that they must keep rates elevated longer will weigh further on copper and the broader complex of base metals.

The metal’s weakness is telling a sobering story about the global economy’s fragility in the face of geopolitical shock. Whether the conflict de-escalates quickly or drags on will determine if this correction turns into something deeper.

What is clear is that the structural drivers  the green transition, urbanisation in Asia, and the digital revolution  have not disappeared. They have simply been overshadowed, for the moment, by war, energy spikes, and fear.

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