On Tuesday, March 3rd, Citi stated in a report that the ongoing conflict between the United States and Israel and Iran has raised the possibility that copper prices could fall below $12,000 per ton in the short term.
"We expect the general situation to be that the conflict will ease within a few weeks, and the copper price will rebound to the range of $13,500 - $14,000 per ton within three months."
Israeli and American troops attacked targets across Iran, forcing Iran to launch retaliatory strikes in the Gulf region. The conflict has spread to Lebanon, disrupting global markets and causing a sharp increase in oil prices.
On Tuesday, the LME three-month copper price dropped to $12,722 per tonne, reaching its lowest level since February 19.
The bank added that although the conflict has brought some risks to copper supply, if the turmoil persists, these risks may not be sufficient to offset the broader selling by investors due to concerns over economic growth.
Citigroup stated that other metals that are net bearish due to the turmoil in the Middle East include tin, nickel and lead.
Meanwhile, the investment bank also pointed out that given that certain countries are vulnerable to the impact of disrupted Gulf shipping and rising energy prices on refinery costs, the price risks of aluminum and zinc are trending upwards.
As the conflict between the United States, Israel and Iran spread to neighboring countries, and after the joint venture of Norsk Hydro in Qatar began to shut down aluminum production, the price of aluminum rose.
The Middle East accounts for 8% of the global aluminum production capacity, and its products are exported through the Strait of Hormuz.
On Monday, a senior official from the Iranian Revolutionary Guard Corps stated that Iran would open fire on any ships attempting to pass through the Strait of Hormuz.
