Under the catalyst of the US-Iran ceasefire agreement, industrial metals rose 5.5% in a single month and are on track for their best performance since January.

Under the catalyst of the US-Iran ceasefire agreement, industrial metals rose 5.5% in a single month and are on track for their best performance since January.

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The industrial metals market is expected to usher in its strongest monthly performance in nearly four months, with the US-Iran negotiations approaching an extension of the ceasefire agreement as the core catalyst. On May 29, the LMEX index, which tracks six major metals on the London Metal Exchange, has risen by 5.5% this month, likely to record the largest single-month increase since January this year.

In recent weeks, industrial metal prices have fluctuated within a narrow range, as the market closely monitors progress in ceasefire negotiations. Ongoing geopolitical conflicts have pushed up inflation expectations and suppressed economic growth prospects, putting pressure on metal demand. The anticipated preliminary agreement for a ceasefire extension has injected momentum for a rebound in risk appetite into the market.

On the geopolitical front, the US and Iran are nearing a historic 60-day ceasefire and the lifting of maritime blockades. According to Xinhua News Agency, US officials said that negotiators from both sides reached a basic consensus on the terms of a memorandum of understanding on the 26th, awaiting approval from senior leaders of both countries. The Iranian side stated that it had received the necessary approval and was ready to sign. According to reports, US Vice President Vance and Treasury Secretary Besent both confirmed that the framework of the agreement is "very close," but stressed that President Trump has not yet given final approval.

Additionally, according to CCTV News, Iran stated that as of now, Iran has not agreed to any memorandum of understanding, nor has it confirmed its approval to the Pakistani mediator. Currently, contradictory statements from the high-level officials of both countries indicate that there remains significant uncertainty as to whether the final agreement can be reached.

Tin leads industrial metals, copper prices supported by supply risks

Looking at the performance of specific varieties, among the six major metals tracked by the LME, tin stands out the most this month. As of press time, London tin futures rose 0.4% to $55,300 per ton, with a cumulative monthly increase of 18%, leading all varieties.

Copper prices have steadily increased, rising 5.6% this month, generally consistent with the overall performance of the LMEX index. The core logic supporting copper prices comes from the supply side. Macquarie Group warned that sulfur supply shortages caused by war are posing a substantial threat to copper mine production. Sulfur is a key input for copper production, and the current shipping backlog in the Persian Gulf is unlikely to be alleviated in the short term.

Macquarie commodities strategist Alice Fox further pointed out in a research report on Thursday that even if a US-Iran agreement is reached, the time required for sulfur shipments to clear the shipping backlog "is likely enough to push copper to the critical point where production cuts become a reality." She estimates that up to 94,000 tons of copper production per month in Congo is at risk, with some production cut announcements possibly coming as early as July.

Overall, there are two factors driving the rise in industrial metals this month: easing geopolitical risks and supply bottleneck concerns. By contrast, the latter's support for copper prices is particularly significant.

Risk Reminder and DisclaimerThe market carries risks, investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article meet their particular situation. Invest at your own responsibility. ```