Copper rose on Friday and was on course for its first weekly gain of the month, after President Trump extended the deadline for Iran to reach a deal. The move eased near-term fears and improved market mood.
Most industrial metals have still fallen this month, as uncertainty around US–Iran talks continues. The conflict is nearing a one-month mark, and this has weighed on demand expectations.
Geopolitical tensions have raised concerns about inflation and have also added to fears of weaker industrial activity worldwide. This has reduced appetite for assets linked to economic growth.
Copper prices are down about 7% so far this month. This fall has occurred alongside broader weakness across base metals.
We remember how copper prices temporarily stabilized in 2025 following the extension of the Iran deadline. This short-lived relief rally provided a valuable opportunity to position for further weakness, as the underlying conflict weighed on global demand. Given the current market, any similar short-term price spike should be viewed with skepticism.
With geopolitical tensions simmering, trading outright futures is risky. Instead, we are looking at options strategies that benefit from price swings, such as long straddles or strangles, to capture movement regardless of direction. We saw a similar dynamic during the 2018-2019 trade war, where copper volatility spiked and created opportunities for options traders even as the price trended downwards.
The fundamental picture remains weak, reinforcing a bearish bias on any price strength. Recent manufacturing PMI data out of China, which consumes over 50% of the world’s copper, has been hovering just above the 50-point contraction line, suggesting sluggish industrial activity. Therefore, buying out-of-the-money puts or establishing bear put spreads offers a defined-risk way to position for a potential slide back towards the 2025 lows.
For industrial consumers, this is a critical time for hedging against sudden supply-side shocks, which remain possible despite the weak demand outlook. Buying call options can cap input costs if a sudden escalation in conflict chokes off supply routes, a lesson learned from price spikes in other commodities during past geopolitical crises. This provides a form of insurance against unpredictable upside moves in an otherwise weak market.
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