Copper and Aluminum Prices Surge on Strong Demand and Geopolitical Tensions

Base metals are on a tear in early June, with copper flirting with $14,000 per metric ton and aluminum hitting its highest level in more than four years. The rally is being driven by a cocktail of factors: persistent supply bottlenecks from the Middle East conflict, expectations of a crunch tariff decision by the Trump administration, and bets on AI and energy-transition-linked demand. Aluminum availability is tightening as the U.S. remains locked in conflict with Iran, while copper traders are bracing for potential trade-policy fallout.

The Strait of Hormuz remains blocked, exacerbating the supply squeeze and pushing cash aluminum contracts to a premium of $116.50 per ton over three-month futures — the widest gap since 2007. Tin, a key component in electronics solder, surged as much as 3.7% to $58,750 per ton, trading near record territory. Analysts at HSBC Holdings Plc describe the current environment as a “super-squeeze,” with metals prices broadly in an upswing fueled by both supply disruptions and robust structural demand.

Goldman Sachs Group Inc. recently lifted its end-of-year copper price forecast by more than 10%, while Citigroup Inc. warned that aluminum faces its most bullish supply-demand setup in at least half a century. On the geopolitical front, President Donald Trump still expects an interim peace deal with Iran despite escalating tensions, including threats from Tehran to suspend negotiations over Israel’s attacks in Lebanon. The conflict threatens to disrupt regional aluminum output, which once accounted for roughly 10% of global supply before hostilities began.

Copper production could also be at risk if Middle East shipments of sulphuric acid — a critical input — continue to be constrained. By midday on the London Metal Exchange, aluminum was up 1.3% at $3,765 per ton, marking a year-to-date gain of more than 25%, while copper rose 0.9% to $13,962 per ton.