Copper could slip under $12,000/t in near term amid Iran conflict, Citi says
Citi said other metals with net bearish exposure to the turmoil include tin, nickel and lead.
SEATTLE (Scrap Monster): Citi said in a note that the ongoing Iran conflict poses a near-term risk of copper prices dipping below $12,000 a metric ton.
'Our base case is the conflict eases within weeks and copper rebounds to $13,500-$14,000/t within three months,' it added.
Israeli and U.S. forces pounded targets across Iran, prompting Iranian retaliatory strikes around the Gulf as the conflict spread to Lebanon, rattling global markets and sending oil prices sharply higher.
Benchmark copper on the London Metal Exchange registered a session low of $12,722 a metric ton on Tuesday, the lowest level since February 19.
The bank added that while the conflict poses some copper supply risks, these are likely insufficient to offset broader investor selling on growth concerns if the turmoil continues.
Citi said other metals with net bearish exposure to the turmoil include tin, nickel and lead.
Meanwhile, it noted aluminium and zinc price risks skew bullish given individual vulnerability to Gulf shipment disruption and refinery cost pressure from rising energy prices.
The price of aluminium rose after Norsk Hydro's joint venture in Qatar initiated a shutdown of its aluminium production, as the war spilled into neighbouring countries.
The Middle East accounts for 8% of global aluminium capacity, and it exports its products via the Strait of Hormuz. On Monday, an Iranian Revolutionary Guards senior official said Iran will fire on any ship trying to pass through the Strait of Hormuz.
Courtesy: www.tradingview.com