Copper surged after Iran agreed to a two-week truce in the Strait of Hormuz, lifting risk sentiment and boosting the industrial metal by up to 2.9% on the London Metal Exchange. The agreement temporarily eases concerns about supply disruptions that have plagued the market since the conflict began. Aluminum, heavily reliant on Gulf exports, also rose as traders anticipate reduced production constraints.

Roughly a tenth of global aluminum output sits in the Persian Gulf, with exports previously hampered by Iranian strikes on operations run by Aluminium Bahrain and Emirates Global Aluminium. Copper on the LME advanced 2.8% to $12,653 a ton, while aluminum gained 0.5% to $3,492.50 a ton. This development signals potential relief for manufacturers facing inflationary pressures tied to metal costs.

The truce represents a critical shift for investors monitoring commodity markets amid geopolitical tensions. Iran's temporary reopening of Hormuz directly addresses supply bottlenecks that had inflated prices and slowed industrial activity. The 2.9% copper gain marks the largest single-day move in weeks, underscoring the market's sensitivity to Middle East stability. Aluminum's 0.5% advance reflects renewed confidence in Gulf production resuming normal operations. This price relief could lower input costs for automakers and electronics makers, though analysts caution the truce's short duration limits long-term impact. The truce's immediate effect on metal prices demonstrates how geopolitical risk can rapidly alter commodity fundamentals. Investors now face a critical decision on whether to scale back hedging positions amid easing supply fears. The truce's temporary nature means market volatility could return if hostilities resume, keeping metal prices under close scrutiny.