Copper Loses 2026 Gains as Iran Conflict Disrupts Metals Markets

Copper prices declined sharply on March 18, 2026, losing more than 8% this month as the intensifying war in the Middle East triggered broad selling on the London Metal Exchange according to Bloomberg. The metal fell to its lowest level since December, pressured by rising energy prices and concerns about global economic stability. The conflict between Iran and Israel has disrupted key energy infrastructure, including a major liquefied natural gas plant, compounding uncertainty in metals markets as reported.

Aluminum also dropped 0.4% to $3,386.50 a ton, despite earlier hitting a four-year high of $3,494.50 per ton following supply disruptions. A leading Middle East producer, Aluminium Bahrain BSC, shut down 19% of its production capacity, exacerbating global aluminum supply concerns according to Seeking Alpha.

The ongoing hostilities have increased risks for manufacturers worldwide, as the potential for a broader economic slowdown has dampened demand for industrial metals. Chinese metals demand was already weak before the recent escalation, adding to downward pressure on prices as Bloomberg reported.

Why Did This Happen?

The war between Iran and Israel has directly impacted key energy and metals infrastructure, including Iran's South Pars gas field and one of the world's largest liquefied natural gas plants according to Bloomberg. The U.S. and Israel have called for de-escalation, but no resolution is currently in sight. Analysts have linked the drop in copper and aluminum prices to rising crude oil prices, which are feeding into inflationary pressures and dampening investor sentiment as Bloomberg reported.

Further escalation in the Middle East could push aluminum prices above $4,000 per ton, according to some analysts. However, the broader economic risks associated with the conflict are already weighing heavily on industrial commodities according to CNBC.

How Did Markets Respond?

The London Metal Exchange has seen broad declines across copper, aluminum, zinc, nickel, and tin. Copper fell 1% to $12,274 a ton in Shanghai on March 18, marking a significant pullback from its all-time high in late January according to Bloomberg. Aluminum, while down from its peak, remains up 13% for the year amid ongoing supply concerns according to Bloomberg.

The selloff in metals markets mirrors broader global financial trends, with global market capitalisation dropping by over $8.5 trillion. India's market cap alone has fallen by $447 billion since the start of the war, echoing the scale of losses seen during the 2020 pandemic according to Business Standard.

What Are Analysts Watching Next?

Analysts are closely monitoring whether the conflict will expand further, particularly with overnight strikes in Lebanon and continued military activity in southern Lebanon according to Economic Times. The potential for additional supply disruptions, particularly in aluminum, remains a key concern for manufacturers. Meanwhile, Chinese demand has improved as falling prices make metals more affordable according to Bloomberg.

Peng Dingui, an analyst with Zhongtai Futures Co., noted that market sentiment remains bullish on aluminum, given the limited production capacity in the Middle East and ongoing supply chain disruptions according to Seeking Alpha. The region accounts for 9% of global aluminum output, and Alba's production cuts have heightened fears of shortages according to Seeking Alpha.

Investors are also watching for policy responses, particularly from the U.S. and other major economies, as energy prices and inflation remain central concerns according to Bloomberg. Analysts warn that prolonged high oil prices could lead to tighter monetary policy, further impacting metals markets according to Bloomberg.