Copper Remains Under Pressure

Copper futures fell below $6.3 per pound on Wednesday, giving back gains from earlier in the week as escalating tensions in the Middle East and growing expectations of central bank interest rate hikes weighed on the outlook for industrial metals. The US launched “self-defense strikes” against Iran in response to the downing of an American helicopter, threatening to undermine peace efforts while fueling concerns about inflation and higher borrowing costs. Investors also awaited the latest US inflation data after stronger-than-expected jobs figures last week reinforced expectations of a Federal Reserve rate hike later this year. Meanwhile, Jefferies expects copper prices to remain higher for longer than previously projected, pointing to an average annual supply deficit of 491,000 tons through 2030 and a slower-than-expected recovery at the Grasberg mine.