Copper prices rebounded on Wednesday, supported by a decline in the dollar and renewed hopes for easing tensions in the Middle East, which bolstered demand forecasts for metals. The most traded copper contract on the Shanghai Futures Exchange ended a two-session losing streak, closing up by 1.14% at 95,590 yuan (approximately $13,864.67) per metric ton. The three-month benchmark copper price on the London Metal Exchange also rose by 1.19%, reaching $12,244.5 per ton by 07:22 GMT, according to Reuters.
On Tuesday, copper prices in both Shanghai and London had declined due to rising energy costs stemming from the ongoing war with Iran, which heightened concerns related to inflation and global economic growth prospects. However, market sentiment improved significantly on Wednesday following remarks from U.S. President Donald Trump, who indicated progress in negotiations aimed at ending the war with Iran, including a significant concession from Tehran, without providing further details. In contrast, Iran denied these statements, claiming that Washington was "negotiating with itself."
Details of the Event
Analysts at brokerage firm Everbright Futures noted in a memo: "Expectations for de-escalation between the U.S. and Iran have become a key factor in improving market sentiment." They added, "This reflects how sensitive markets are to geopolitical developments, although uncertainty still surrounds the negotiation process." The weakness of the U.S. dollar also supported base metal prices, making dollar-denominated commodities more attractive to investors dealing in other currencies.
In the Shanghai market, aluminum prices rose by 0.63%, nickel by 1.08%, lead by 0.3%, and tin by 1.91%, while zinc fell by 0.28%. On the London Metal Exchange, nickel increased by 2.06%, lead by 0.5%, tin by 0.64%, and zinc by 0.74%, while aluminum decreased by 0.41%.
Background & Context
The price of diesel in Vietnam has more than doubled since the onset of the war in the Middle East, according to data released by the Ministry of Commerce on Wednesday. Diesel prices have surged by approximately 105% since February 26, just two days before the U.S. and Israel launched their strikes on Iran, with the government raising the price to 39,660 dong (around $1.50) per liter on Wednesday, compared to 19,270 dong last month, according to the Ministry of Commerce. Additionally, the price of 95-octane gasoline rose by about 68% during the same period, from 20,150 dong to 33,840 dong.
This sharp increase in oil prices since the beginning of the conflict has led to rising fuel costs and increased inflation rates, raising concerns about global supply shortages. Vietnam has recently requested fuel support from several countries, including Qatar, Kuwait, Algeria, and Japan. It also signed an agreement with Russia on Monday for oil and gas production between the two countries.
Impact & Consequences
The Vietnamese Ministry of Finance proposed on Tuesday to halve the environmental protection tax on gasoline and diesel. Under these circumstances, Nguyen Van Chi, a resident of Hanoi, stated on Wednesday that he had not used his truck in the past two weeks, preferring to ride his bicycle as much as possible. The 54-year-old businessman added, "With this outrageous diesel price, I can't even sell my truck; no one would want to use it."
In a related context, South Korean semiconductor manufacturer SK Hynix announced on Tuesday its intention to file a confidential application for listing its shares in the United States in the second half of 2026, a move that could allow it to raise up to $14 billion. An insider explained that the company plans to offer between 2% and 3% of its total shares, with proceeds directed towards funding chip manufacturing facilities in Yongin, South Korea, and Indiana, USA.
Regional Significance
The Arab region is directly affected by these developments, as rising metal and oil prices may increase economic pressures on importing countries. Additionally, geopolitical tensions in the Middle East impact global market stability, which reflects on the prices of essential commodities.
In conclusion, markets remain under the influence of geopolitical tensions and global economic changes, necessitating that investors and analysts closely monitor developments.