On April 8, the rapidly evolving Middle East conflicts caused volatility in copper prices. The previous day, U.S. President Donald Trump agreed to a two-week ceasefire with Iran, easing market concerns on a global economic slowdown. Subsequently, copper prices in both futures and spot markets saw notable growth, with refined copper spot premiums in China also increasing due to the contango structure in near-month contracts.
However, on April 8 local time, the first day the temporary U.S.-Iran ceasefire took effect, Israeli forces launched the largest airstrike since the current conflict began against Lebanon. In response, Iran stated that the ceasefire agreement had been violated, once again closed the Strait of Hormuz, and threatened to take deterrent action against Israeli military targets. This escalation in macro-risk events could undermine market sentiment and put renewed downward pressure on copper prices in the short term.
Trading in China's refined copper market weakened on April 8, due to growing prices and cautious market sentiment. In contrast, copper scrap trading picked up, as the refined-scrap copper price spread widened and downstream processors restocked raw materials.
Regarding China's copper semis markets, mediocre end-user demand and volatile copper prices dampened trading activity, leading to relatively steady production and sales on April 8. Though April remains China's traditional peak consumption season, market participants generally held low confidence in actual demand, and copper consumption may remain largely supported by rigid downstream and end-use production needs.
Written by Mingyuan Wang, wangmingyuan@mysteel.com
