Copper rallies on easing oil, Middle East peace deal hopes

Copper firmed on Friday amid easing oil prices and a wave of optimism that a peace deal between the U.S. and Iran to end the war may be within reach. The benchmark three-month copper on the London Metal Exchange was up 1.44% at $13,676 a metric ton by 0702 GMT. The most-traded copper contract on the Shanghai Futures Exchange rose 1.21% to 104,660 yuan ($15,474.24) a ton. U.S. President Donald Trump said on Thursday that a peace deal could be signed as soon as this weekend, which could reopen the Strait of Hormuz. Iran, however, said no final decision had been made on a possible agreement. Copper is widely considered a bellwether for the health of the global economy, and the war has weighed on prices. Copper prices on both the LME and the SHFE had fallen to multi-week lows on Thursday amid one of the worse outbreaks of violence between the U.S. and Iran since the sides agreed on a ceasefire in April. Aluminium was also firm, gaining 0.87% on the LME and 0.67% on the SHFE, with LME aluminium remaining in a comparatively slim backwardation on Thursday. "The sharp narrowing of the LME Cash-3M premium ... highlights the unwinding of extreme geopolitical risk premiums and speculative long positions, as the market reassessed the extent and duration of supply disruptions," said Rupankar RM, head of market research and data intelligence at AL Circle. Persistently high inflation has also triggered concerns about potential higher-for-longer interest rates. High interest rates dampen demand prospects for growth-dependent industrial metals. On the LME, aluminium gained 0.87%, zinc gained 0.97%, lead added 0.21%, nickel gained 0.63% and tin added 0.38%. Elsewhere on SHFE, aluminium gained 0.67%, zinc added 0.21%, lead lost 0.65%, nickel added 0.32% and tin rose 2.28%.