Copper-related stocks were among the biggest decliners in the Hong Kong market. At the time of writing, JIANGXI COPPER (00358) fell 6.34% to HK$37.54; China Gold International (02099) dropped 5.06% to HK$159.5; and CHINFMINING (01258) declined 4.38% to HK$12.23.

According to an Everbright Securities research report, geopolitical risks in the Middle East may keep oil prices elevated and delay expectations for U.S. interest rate cuts. Simultaneously, a stronger U.S. dollar, driven by safe-haven demand, is putting downward pressure on copper prices.

Guolian Minsheng Securities also noted that ongoing tensions between the U.S. and Iran have led to significant volatility in crude oil prices and a decline in risk appetite. The market is pricing in stagflation, and reduced expectations for Federal Reserve rate cuts, coupled with a stronger dollar, have contributed to a pullback in commodity prices.

Huaxin Securities previously indicated that refined copper rod orders have generally increased significantly among companies that have resumed operations, while production at recycled copper rod enterprises remains weak. The substitution of scrap copper for refined copper has diminished, providing some underlying support for copper prices.

Zhongyou Securities pointed out that Middle East tensions have little direct impact on copper supply. However, recession expectations driven by rising oil prices are weighing on copper prices, leading to a divergence in performance compared to aluminum prices. The firm noted that a rapid recovery in downstream operations suggests gradual acceptance of copper prices above RMB 100,000 per ton.