Key takeaways from the latest Base Metals Market Tracker

The latest forecasts from Fastmarkets' team of analysts are ready to view.

Aluminium: Oversold
Aluminium has been the hardest hit base metal over the past week, after relentless selling pressure took it to fresh multiyear lows while its LME peers generally consolidate or try to rebound. Aluminium is seeing far less in the way of supply restraint or disruptions than the other metals. But this market is technically oversold and overdue a rebound now. Unless producers can contribute to rebalancing the market, rallies will only be selling opportunities.

Copper: Volatile price recovery in Q2
Copper was the worst performer of base metals complex in the first quarter of the year, realizing a loss of 20% – in fact its poorest performance since the third quarter of 2011. After the macroeconomic shock of the past quarter, we expect a recovery in copper prices in the second quarter while the dust settles. Nevertheless, we contend that the global economic recovery will be slow and low in the months ahead, thereby eliciting volatility and producing a bumpy rather than a smooth rebound in prices.

Lead: Demand, supply and price outlooks lowered
Now that the initial adjustment to the impact of the Covid-19 virus has run its course, lead prices have started to oscillate sideways while they react to noise in the wider market. This is likely to continue until there is a better understanding of how long lockdowns are going to last and how much damage has been done to both supply and demand. We continue to think that demand shock will be the sharpest. Uncertainty will keep would-be buyers of vehicles away from dealerships and auto manufacturers are unlikely to ramp-up production until demand shows signs of recovering. We have revised our demand forecasts lower this week and our supply outlook has been lowered too.

Nickel: Further supply-demand balance revisions
We have incorporated the latest revisions to our stainless steel market outlook into our nickel market balance, along with the nickel production disruptions discussed here last week. This has raised the global refined nickel surplus for 2020 from 34,000 tonnes to 66,000 tonnes. We still believe prices can average around $12,000 per tonne in the second quarter though, so our base case price forecast remains unchanged for now.

Tin: Mixed fundamental indicators
The LME tin price has rebounded by around 10% since it plunged to its lowest level since July 2009 at $12,715 per tonne on March 20. The rebound has been driven by some short-covering, a stabilization in broad risk sentiment, and tighter supply from Indonesia. We expect a recovery in prices in the course of the second quarter although we acknowledge that the refined tin market is likely to post a material surplus this year after accounting for the latest revisions to our supply-demand balance forecast.

Zinc: Supply disruptions helping prices consolidate
Zinc prices continue to consolidate, helped by the emergence of virus-related supply disruptions. Indeed, producers’ quarterly reporting season is almost upon us with reports likely to be under closer scrutiny than usual. But while we remain doubtful that this could be the catalyst for a strong price rebound, even if the market gets a sense of larger disruptions than those currently priced in, it could at least reduce the risk to prices of lower lows in the second quarter.

Click here to view the Base Metals Market Tracker in full.

What to read next
US copper scrap market participants are shifting from COMEX to LME pricing in response to extreme price volatility and a new 50% copper import tariff. The change is influencing discount formulas, export strategies and long-term trading dynamics across the sector.
The proposal follows preliminary discussions with the market and internal analysis of price usage, which suggests low market liquidity and a lack of demand. Specifically, Fastmarkets is proposing to discontinue: MB-CU-0410 Copper rod premium, ddp Midwest US, US cents/lbQuality: Purity of 99.95-99.99%. Thicknesses of 8 millimeters or 0.3125 inchesQuantity: Min 25,000 poundsLocation: Delivered US MidwestUnit: US […]
After a month-long consultation period, Fastmarkets is amending the below specifications, following no negative feedback from market participants and internal data analysis. The following changes will take place: The new specifications are as follows, with amendments in italics: MB-CU-0002 Copper grade 1 cathode premium, ddp Midwest US, US cents/lb Quality: Grade A 99.9935% min copper cathode conforming to LME […]
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
LME copper prices took a significant hit following US President Donald Trump's announcement of a potential 50% tariff on copper imports. The uncertainty surrounding the timeline and implementation of the tariff has left market participants hesitant, with analysts noting its immediate impact on price momentum and trading activity.
Fastmarkets has launched MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonne on July 9 due to an expected increase in Indonesia-origin aluminium exports. MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonneQuality: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications. Ingot, T-bar, sowQuantity: Min 500 tonnesLocation: FOB IndonesiaTiming: […]