Copper prices surged on Monday, with London Metal Exchange (LME) copper setting a new all-time closing high, demonstrating the metal market's robust resilience to geopolitical risks in the Middle East. Tightening supply and demand have replaced geopolitical variables as the core driver of price movements.

LME copper closed up 2.7% at $13,943 per tonne, surpassing the previous record close of $13,618 set on January 29th and establishing a new historical high. All major metal contracts on the LME recorded gains.

Last week's rally extended into Monday, even as the former US President rejected Iran's latest peace proposal, calling it "completely unacceptable," with significant differences remaining between Washington and Tehran regarding a framework to end the conflict and reopen the Strait of Hormuz. Metal prices advanced alongside stabilizing equity markets, indicating limited investor concern over a severe escalation of tensions. LME copper has gained approximately 12% since late 2025, despite experiencing sharp selling pressure in the initial phase of the Iran conflict. At a major annual metals industry gathering in Hong Kong last week, bullish sentiment prevailed, with strong industrial demand and supply constraints cited as key factors.

Supply-demand fundamentals are driving copper's independent price trajectory. According to Bloomberg, citing Jia Zheng, head of trading at Suzhou Chuangyuan Ying Capital Management Co., "The market has moved past the impact of the US-Iran conflict. Copper has now formed its own independent price trend." She noted this is primarily due to factors such as tight supply and declining inventories.

China's exports denominated in US dollars grew by 14.1% year-on-year in April. Exports from high copper-consuming sectors like electric vehicles, lithium batteries, and wind turbine units showed robust performance, increasing by 68.1%, 43.2%, and 40.7% respectively, further strengthening market expectations for global industrial metal demand.

Analysts at Citigroup believe that sustained demand for metals from the energy transition and defense sectors, coupled with supply-side constraints, would enhance copper price resilience even under an extreme scenario of a prolonged closure of the Strait of Hormuz.

Aluminum and nickel also strengthened. Aluminum prices rose over 2%, while nickel gained 1.9%. The closure of the Strait of Hormuz is impacting Gulf aluminum smelters reliant on sulfur supplies from the region, as well as nickel producers in other areas.

A team led by Morgan Stanley analyst Amy Gower noted in a report, "Aluminum has often lagged on days of Middle East 'de-escalation,' but given the lengthy time required to restart smelters, we believe this could present a buying opportunity." The team added that if extended closures of the Strait of Hormuz lead to further production cuts in the Middle East, LME aluminum prices or regional premiums could receive additional support.