GEM Mining Consulting reveals in its latest analysis that copper, alongside other industrial commodities, are set to face challenges amid the ongoing current war involving Iran.
The industrial engineering company says that early macro signals suggest that energy price risk premia, supply shut-ins and persistent uncertainty could last for weeks or even months, even if physical damage to infrastructure remains limited. This risk is considered crucial given recent statements from Iran’s new supreme leader indicating an intention to keep the Strait of Hormuz closed.
According to the US Energy Information Administration, the Strait of Hormuz carried more than 20 million barrels per day of oil in H1 2025 – roughly 20% of global petroleum liquids consumption and about one-quarter of global seaborne oil trade.
For copper, the implications of the war link to demand and macro channels, as well as cost, inventory and bottleneck channels. GEM Mining says these forces are particularly relevant because the International Copper Study Group projects the refined copper market balance to shift into an 150,000 tonne deficit in 2026, implying that any additional disruption may have amplified price effects.
Copper presents a complex and two-sided outlook, in comparison to oil – which is the most immediately and directly exposed to the conflict. GEM Mining reports that while near-term prices may come under pressure from weaker risk sentiment and growth concerns, a prolonged disruption could later support prices through higher costs, tighter supply chains, and an already constrained market balance.
According to the US Geological Survey, Iran produced about 279,700 tonnes of primary copper, 87.9 million tonnes of iron ore, and 9.8 grams per tonne of gold in 2023. The country also holds a very large copper ore and iron ore reserves.
Aluminium is also exposed to the combination of energy intensity and freight dislocation, implying that market stress may be expressed not only through benchmark prices but also through higher regional premia and tighter physical availability.
GEM Mining is focused on driving the development of the mining industry through solutions in management and economics. Its six areas of expertise include analytics, economics, evaluation, strategy, environment and society, and planning.
Write to Aaliyah Rogan at Mining.com.au
Images: GEM Mining
