What began as an overall surge in the metals market towards the beginning of the year has quickly turned far more uneven, as the ongoing Middle East conflict enters its fifth week. While early market sentiment was dominated by fears of a copper crisis, the unfolding reality focuses on a different crisis surrounding aluminium.

Global institutions, including the International Energy Agency, International Monetary Fund and World Bank, have already referred to the conflict as one of the most severe recent energy shocks. Beyond the immediate humanitarian impact, the geopolitical situation is disrupting trade routes, hoisting energy prices and introducing fresh volatility across markets.

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Early 2026: Markets boom with copper demand

The start of 2026 brought market attention to copper. Prices soared to an all-time high, surpassing USD 14,500 per tonne in January before stabilising around USD 13,000, and the monthly average settled around USD 13,088.88 per tonne. Compared year-on-year, the gaping difference was USD 4,111.31 per tonne, marking a 45.8 per cent rise.

The driving factor of rising demand was an anticipation of a supply crunch due to global electrification, Artificial Intelligence (AI) data centre expansion and infrastructure growth.

However, the bullish sentiment was founded on speculation. By the end of Q1, global exchange inventories had climbed to more than 1.4 million tonnes, indicating that supplies were sufficiently available. With the cooling of investor sentiment, prices eased to around USD 12,300 per tonne.

Aluminium: The real pressure point

As the Middle East tensions intensified, investor attention took a sharp turn towards aluminium, where the impact has been immediate and severe. Shutdown of a fundamental global trade corridor, the Strait of Hormuz, which gives passage to around 60 per cent of the Gulf region’s alumina supply, has effectively become a bottleneck.