Iran-US Ceasefire MoU Stokes Metals Market Volatility and Deepens Iran’s Economic Crisis

The United States and Iran signed a memorandum of understanding on June 17 that temporarily eased hostilities but left the Strait of Hormuz in a state of “both open and closed,” according to observers. While the agreement has kept large‑scale fighting at bay, sporadic missile strikes and tanker interceptions have continued, keeping regional shipping uncertain.

The conflict’s fallout has hit global metals markets. Destruction of smelters in the UAE and Bahrain removed an estimated 3.5 million tons of aluminium output, pushing London Metals Exchange aluminium futures to four‑year highs. Copper prices have hovered near the $14,000‑per‑ton record, now more influenced by a pending U.S. tariff decision than by Gulf tensions. Zinc, nickel, tin and lead have shown mixed responses, with zinc outperforming due to a global deficit.

Iran’s domestic economy remains under severe strain. Inflation rose 88.6 % year‑on‑year in June, with food prices up 134 %, while unemployment sits at 7.5 % and real GDP contracted 0.7 % in the latest year. The IMF projects a 6.1 % shrinkage in 2026. Recovery is expected to be prolonged, hindered by lingering sanctions, war damage, and a prolonged internet shutdown.

Analysts warn the MoU does not resolve core issues such as Iran’s nuclear programme, missile capabilities, or regional proxy networks, leaving the peace fragile and the risk of renewed conflict high.