RBC Slashes Copper Miners as War Roils Commodity Markets

Edgen Stock·Mar 20 2026, 12:08

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Key Takeaways

Royal Bank of Canada downgraded its outlook for four copper miners, forecasting a price drop to $4.20 per pound as the ongoing war with Iran upends the global commodity outlook. The conflict has severely disrupted critical supply chains, with oil flows through the Strait of Hormuz nearly ceasing and fertilizer prices spiking, signaling broad economic risks and heightened investor caution.

Analyst Downgrade: On March 20, RBC cut its outlook for four copper miners, projecting the metal’s price will fall to $4.20 a pound.
Energy Crisis: The conflict has disrupted nearly 15 million barrels of oil per day by blockading the Strait of Hormuz, pushing Brent crude prices above $100 a barrel.
Supply Chain Shock: The blockade has trapped roughly 25% of the world's fertilizer trade, causing urea prices to climb 19% in a single week and threatening future food prices.

RBC Slashes Copper Outlook, Forecasts Price Drop to $4.20

Royal Bank of Canada (RBC) sharply revised its commodity outlook on March 20, 2026, downgrading four copper miners in anticipation of falling prices. The bank now forecasts copper will drop to $4.20 a pound, driven by the expanding geoeconomic fallout from the war in Iran. In its note, RBC warned that the popular 'buy the dip' strategy for commodities is approaching exhaustion as the protracted conflict reshapes global markets and dampens demand.

War Halts 15M Barrels of Oil Per Day Through Hormuz

The downgrade reflects a severe deterioration in the global economic landscape, anchored by an unprecedented energy crisis. The conflict has effectively shuttered the Strait of Hormuz, the world’s most critical maritime chokepoint for energy. This has reduced oil flows by an estimated 15 million barrels per day, triggering what the International Energy Agency (IEA) called the “largest supply disruption in the history of the global oil market.” Consequently, Brent crude prices have climbed over 40% to surpass $100 per barrel, a stark increase from the approximate $65 level seen before tensions escalated.

Fertilizer Costs Spike as Key Trade Route Remains Blocked

The war's impact extends far beyond energy, creating severe shocks in agricultural supply chains. The Strait of Hormuz is a vital conduit for about one-quarter of global fertilizer exports, including nearly 49% of the world's urea. With traffic stalled, the price for urea in the Middle East jumped 19% in just one week. This directly raises costs for farmers, as fertilizer accounts for 21% of total corn production expenses, and points toward significant food price inflation in the coming months. The disruptions create a powerful headwind for the global economy, validating the risk-off sentiment behind RBC's bearish call on industrial metals.