CHOCHILINO Copper Nears Record High as Traders Tune Out Trump's Iran Rejection %

By Michael Kern – May 12, 2026, 12:00 PM CDT

Copper climbed as much as 0.5% to $13,643 a ton on the LME Monday, its highest intraday level since the January 29 spike, with the exchange’s combined metals gauge closing Friday at a record.
Trump rejected Iran’s latest peace proposal as “totally unacceptable,” extending the Hormuz blockade, but base metals are decoupling from the oil-driven panic that hit the complex in February.
Grasberg disruptions, Chilean mining accidents, and a looming Chinese sulfuric acid export ban are squeezing supply just as AI data centers and clean-tech exports drive demand.

Copper is defying the ‘war discount’ usually applied to industrial metals, nearing an all-time high on Monday as a brutal supply crunch proves more powerful than the threat of a global recession The three-month contract on the London Metal Exchange climbed as much as 0.5% to $13,643 a ton, its strongest intraday print since the January 29 spike that briefly carried prices above $14,500, according to Bloomberg.

The rally extended across the LME complex. Aluminum jumped more than 2%, nickel added 1.9%, and the exchange’s all-in price gauge closed Friday at a record. Metals are now solidly higher on the year despite the sharp selloff that hit the complex in the opening weeks of the war, when investors braced for an economic shock that hasn’t fully materialized. Copper is up roughly 10% since the end of 2025.

President Donald Trump rejected Iran’s latest counterproposal as “totally unacceptable” over the weekend, calling the ceasefire that took effect April 8 “unbelievably weak” and “on life support,” NBC News reported. Tehran has insisted on full sovereignty over the Strait of Hormuz, war reparations, the release of frozen Iranian assets, and an end to Washington’s naval blockade as conditions for reopening the waterway. About one-fifth of global oil and gas flows are stuck behind that dispute.

Oil markets are still trading on every headline. Brent closed Friday near $100 a barrel after starting the war in late February at $73. Copper has taken a different path.

“The market has moved on from the impact of the US-Iran conflict, and copper has its own distinct price trend now,” Jia Zheng, a trading manager at Suzhou Chuangyuan Harmony-Win Capital Management, told Bloomberg.

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That trend is supply. Major disruptions at Freeport-McMoRan’s Grasberg mine in Indonesia and a string of accidents at Chilean operations have throttled global production, with the world on track for its first annual contraction in copper output since the pandemic. On top of that, China’s plan to halt sulfuric acid exports starting in May threatens to squeeze roughly 15% of global copper production that depends on the chemical for extraction, J.P. Morgan analysts said.

Demand is doing its part too. China’s exports rose 14% in April from a year earlier, with clean-tech shipments leading the way. Both categories are copper-intensive. AI data centers continue to soak up tonnage. Citigroup analysts argue that energy transition and defense demand will keep copper resilient even if Hormuz stays closed for an extended stretch.

Aluminum is the one base metal still lagging when tensions ease. Gulf smelters depend on regional inputs, and restarting capacity once it’s curtailed takes time. “Aluminum continues to underperform on ‘de-escalation’ days for the Middle East conflict, but given the long timeframe needed to restart smelters, we think this may offer buying opportunities,” Morgan Stanley analysts led by Amy Gower wrote in a note.

The risks haven’t gone away. A growth shock would hit industrial demand across the complex, and the roughly 730,000 to 830,000 tons of copper sitting in U.S. warehouses as a tariff hedge could flood global markets if Trump’s threatened import duties land lighter than expected. For now, traders are betting the supply story wins.

By Michael Kern for Oilprice.com

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