Fastmarkets monthly base metals market update

Key points

1. Global copper markets face 2026 amid record highs and supply strains
   Global copper markets are ending 2025 and facing 2026 uniquely strained after an unprecedented year – record high exchange prices due to supply-demand imbalances created by shortages in the refined market and record low concentrate treatment charges (TCs) due to imbalances created by shortages in the raw material market.
   

2. Smelter cuts could push copper prices higher in 2026
   The dilemma is that rebalancing the concentrate market requires smelter production cuts, but this will only reduce metal supply, exacerbating tightness in the refined market. In other words, for the TCs to begin normalizing in 2026, exchange prices may be forced even higher.
   

3. Potential Section 232 tariffs poised to disrupt US copper trade in 2026
   Speculation about the possibility of Section 232 tariffs being levied on US copper imports has not gone away and may well distort trade flows and regional inventories again in the first half of 2026 as it did in 2025.

What do our analysts say?

The copper market’s fundamentals remain structurally bullish, supported by supply disruptions, regional availability distortions, and resilient long-term demand prospects driven by electrification and investment in AI infrastructure. Given this background, the price uptrend may remain intact a while longer. But, having come so far already, we should be wary about how much of the bullish narrative is priced in by now, and also wary about how the speculative froth in the price could be quickly blown away by any major correction in equity markets and especially in AI stocks.

Andrew Cole, Fastmarkets

Key points

1. Aluminium prices surge amid electrification and AI-driven demand in 2025
   LME aluminium prices have risen 12.3% year-on-year over the January–November period, signalling that the April Liberation Day sell-off has been firmly shrugged off and the bulls have regained control. The light metal ranks as the third-best performing base metal, behind copper, which is up 24.5%, and tin, which has stolen the spotlight with a 33.8% gain, compared to a year ago. This strength reflects robust demand driven by significant investment in electrification, AI data centres, and defence. These structural trends are expected to be long-lasting, with growth spreading geographically as more regions pursue electrification and digitalisation.
   

2. Rebounding MJP aluminium premiums signal renewed market confidence 
   Fastmarkets’ MJP aluminium premium index has rebounded sharply to $120–$130 per tonne, up from the October low of $57–$75 per tonne. Confidence has improved following the US–Japan trade deal and new Japanese leadership. Nearby LME spreads are in double‑digit contango, reinforcing carry trades and inventory holding, while European premiums remain firm, adding a supportive global backdrop.
   

3. FOB WA alumina prices plunge amid supply normalization and refinery expansions
   The Fastmarkets FOB WA alumina index has fallen sharply to $315 per tonne, down from the record high of $800 per tonne reached at this time last year. Supply normalization and a ramp up in new refineries coming online from Indonesia and China has pushed the index down to $315 per tonne. Price weakness has emerged despite Alcoa’s announcement to permanently close its Kwinana’s 2.2 million tonnes refinery and the reduction in Rio Tinto Yawrun operation by 40% to 1.2 million tonnes per annum, in a bid to extend the plants life.
   

What do our analysts say?

Aluminium has regained bullish momentum after a brief November pullback, supported by strong year-to-date gains, firm premiums, and structural demand drivers such as electrification and digitalisation. While alumina prices have softened on supply normalisation, the outlook for aluminium remains positive, with bulls targeting double-digit growth into 2025. In light of such a backdrop, we remain constructive on aluminium’s price to potentially target $3,000 per tonne.

Andy Farida, Fastmarkets

Key points

1. Nickel prices hit post-Liberation Day lows in November
   The nickel cash price traded below the $15,000 per tonne level in November, dropping to a low of $14,280 per tonne, the lowest since Donald Trump’s “Liberation Day” sell-off in April.
   

2. Oversupply pressures nickel market toward further price declines
   The market remains in a state of significant oversupply, leaving little room for bullishness. The coming months are likely to see a further decline in prices or at best a return to sideways consolidation.
   

3. Nickel market faces supply risks despite structural oversupply
   Although the market remains in a state of structural oversupply – and is expected to remain in surplus until 2028 – supply-side risks are mounting. Indonesia – the world’s top miner of nickel – could take a firmer stance on restraining the country’s supply. There could also be delays in issuing mining permits in the New Year.
   

What do our analysts say?

The nickel market has been in surplus since 2022, thanks to structural oversupply. With Fastmarkets forecasting the market to remaining oversupplied until 2028, there is little scope to be bullish on prices in the near-term. A recovery in prices will require greater supply discipline from Indonesia, the world’s top miner of nickel.

Olivier Masson, Fastmarkets

Key points

1. LME lead prices see volatile swings, breaking and returning to range
   Three-month LME Lead prices had a month of two distinct halves, rising aggressively in the first half from $2,025 per tonne to $2,097 per tonne and in the process breaking out of a multi-month range that had held since early June, before slumping back to near the bottom of the long-held trading range by month end.
   

2. Fund activity fuels lead price rally with short-covering and fresh buying
   Fund buying and short-covering seemed to be the main driver, with the net fund long position rising to 18,795 lots on November 14, from 5,688 lots at the end of October. We had noted a polarized fund position at the end of October and had warned of potential for either a short-covering rally, or long liquidation, as it happened a mix of short-covering and fresh buying drove prices higher.
   

3. Lead price rally stalls as LME stocks surge
   The rally came to an abrupt halt when 45,150 tonnes of lead was delivered into warehouse Friday November 14 (reported in LME data on December 17), taking stocks to 266,125 tonnes. Prices ended the month back around $1,980 per tonne.
   

What do our analysts say?

Despite the pick-up in volatility in November that saw lead break out of its long-held range, prices ended the month back in the range and looking balanced again, although the fund position remains polarized, so there is still room for more volatility.

William Adams, Fastmarkets

Key points

1. China’s zinc surplus meets global shortfall amid export bottlenecks
   China has a significant surplus in zinc production, while the rest of the world faces a shortfall presently. Chinese exports hit a three-year high in October, but slim margins and logistical challenges are acting as a bottleneck, limiting how quickly the market can rebalance.
   

2. Zinc prices forecast to decline amid global surpluses and volatility 
   The average LME zinc price for 2025 is forecast at $3,218 per tonne, with a slight increase expected in the first half of 2026 due to ongoing regional disparities. However, prices are projected to decline as global surpluses continue into 2026-27, while macro factors will cause volatility into early 2026.
   

3. Zinc oversupply looms as smelter expansions outpace demand growth
   Stockpiling by Chinese smelter is creating downside pressure for zinc treatment charges presently. Despite this and recent guidance downgrades we believe the global market is facing notable oversupply in 2026-27 as mine and smelter expansions outpace tepid demand growth.
   

What do our analysts say?

Supply tightness continues to underpin LME zinc. But with Chinese metal now heading to LME warehouses and smelter expansions in Europe set for commissioning we believe the price bias could soften towards mid-2026.

James Moore, Fastmarkets

Key points

1. Tin prices hit three-year high amid prolonged supply disruptions
   Tin prices surged to a three-year high, with LME three-month tin touching $40,000 per tonne on December 1. Disruptions remain widespread, and with no clear path to normalization, the squeeze may extend well into the first quarter 2026.
   

2. Green and digital transition drives projected 40% surge in tin demand by 2030
   Tin’s essential role in electronics, EVs, solar, and data centres continues to fuel resilient demand. The International Tin Association projects a 40% surge in global tin use by 2030, powered by the green and digital transition.
   

3. High tin prices curb spot buying as market adapts to scarcity
   While supply tightness persists, high prices are curbing spot buying. Many manufacturers now purchase only as needed, signaling that the market has adapted to elevated price levels and long-term scarcity.
   

What do our analysts say?

While the tin market remains fundamentally undersupplied due to Myanmar’s stalled recovery and regulatory headwinds in Indonesia, short-term macro factors such as tighter dollar liquidity and weaker sentiment across risk assets may lead to temporary periods of consolidation or correction. Nevertheless, unless significant new supply becomes available, tin’s uptrend is likely to continue into early 2026.

Rory Deng, Fastmarkets

Key points

1. Copper market faces supply risks as 929,000 tonnes lost to mine disruptions
   The copper market remains sensitive to mine disruptions, with 2025 seeing nearly 929,000 tonnes lost due to unplanned outages, including from the major outage at the Grasberg mine in Indonesia after a fatal mudslide there in September. The outage effects extend into 2026 and possibly 2027, increasing supply risk and potential price volatility.
   

2. US-China trade easing boosts copper outlook, but near-term demand may dip
   While US-China trade tensions have eased, which is a positive for copper use, tariff front-running may have brought demand forward into the first half of the year, which means demand dynamics may look weak in the next 6 months or so. There is less ambiguity in the long term, however, driven by the buildout of AI infrastructure, electricity generation and grid expansions, clean energy, and continued EV adoption.
   

3. Copper emerges as a safe-haven asset amid geopolitical and economic uncertainty
   Copper is increasingly seen as a safe-haven asset alongside gold and silver, attracting investments amid geopolitical risks and concerns over fiat currency credibility, leading to synchronized inflows and price correlations among these metals.

What do our analysts say?

Copper prices reached record highs in October 2025 but have since entered a consolidation phase influenced by a stronger dollar and tighter liquidity. Despite short-term profit-taking, the market’s structural fundamentals remain bullish, supported by supply disruptions, regional availability distortions, resilient long-term demand driven by electrification and AI infrastructure, and elevated fund positioning.

Andrew Cole, Fastmarkets

Key points

1. US-Canada trade talks could reshape aluminium pricing amid tariff rollback prospects
   Trade negotiations between the United States and Canada remain stalled following the airing of the Reagan tariff advertisement. However, Canadian Prime Minister Mark Carney has expressed interest in resuming talks. Should discussions lead to a reduction in steel and aluminium tariffs, the impact on pricing could be significant. A rollback in tariffs may trigger a sharp correction in the US Midwest aluminium premium, currently at an all-time high of 88 cents/lb. This move could reverberate across global markets, prompting European aluminium premiums to retreat in response.
   

2. Aluminium prices surge amid supply disruptions and bullish breakout 
   Aluminium has enjoyed a strong bullish flow on the back of the bullish technical breakout above $2,700 per tonne and the barrage of supply concerns from several established smelters. Century’s aluminium operation in Iceland, Grundartangi, has announced that the affected potline will only be operational in 11 to 12 months and has affected 231,000 tonnes of aluminium. Meanwhile, South32’s Mozal power contract negotiations have stalled with Eskom, raising the probability that the smelter could be curtailed in March 2026.
   

3. Global aluminium deficit looms for 2026 amid rising consumption and supply challenges
   Considering the supply disruptions, we now forecast a global deficit of 142,000 tonnes in 2026, with China recording a deficit of 2.54 million tonnes, partially offset by a surplus of 2.40 million tonnes in the rest of the world. Global aluminium production is expected to reach 75.45 million tonnes in 2026, up by 2.2%, while global aluminium consumption is likely to increase by 3.0% to 75.592 million tonnes.
   

What do our analysts say?

The US-China trade truce, bullish fund positioning, as well as fresh supply worries out of Century (Iceland), South32 (Mozambique) and Rio Tinto (Australasia) aluminium smelters, ignited the bullish move in October. Only a bearish close below $2,700 per tonne will force us to switch our bullish bias to a bearish tone. In light of such a backdrop, we remain constructive on aluminium’s price to potentially target $3,000 per tonne.

Andy Farida, Fastmarkets

Key points

1. Nickel prices steady in October, averaging $15,080 per tonne
   The nickel price continued to trade on either side of the $15,000 per tonne level in October. The LME nickel cash price averaged $15,080 per tonne, down by 0.15% from the $15,102 per tonne average in September.
   

2. Nickel market oversupply persist as Indonesia’s role in balancing grows
   The market remains in a state of significant oversupply, a situation that has persisted since 2022. With Indonesia being the largest producer of nickel, the country must be part of the supply discipline needed to bring the market back into balance.
   

3. Indonesia’s mine quota reviews add supply risks, but nickel prices remain under pressure
   Indonesia is now implementing annual mine quota reviews – which could be used to limit supply – and has increased royalties. There is also greater environmental oversight in the country. However, these are merely supply risks since no concrete measures have been taken to limit domestic production significantly. Until concrete measures are announced, the price is unlikely to find support.
   

What do our analysts say?

Structural oversupply has left the nickel market in surplus since 2022, leading to weakening nickel prices. Since Fastmarkets expects another large market surplus this year, and for surpluses to continue, it is hard to expect any near-term improvement in pricing. For prices to see any significant upside, greater supply discipline is required.

Olivier Masson, Fastmarkets

Key points

1. LME lead prices break higher in November amid balanced market dynamics
   Three-month LME Lead prices continued to trade sideways in October, with both the top and bottom areas of the range tested, but eventually, prices broke higher in November. The fact prices had been trading sideways since July suggested a well-balanced market. International Lead and Zinc Study Group (ILZSG) data put the market in a 51,000-tonne surplus in the January–August period. In a 13-million-tonne market, that suggests an all-but-balanced supply and demand situation.
   

2. Volatile LME stocks see sharp inflows, rising to 266,000 tonnes in November
   LME stocks have become more volatile. While most days there is an outflow, there have been more incidents of large inflows, one in mid-October and another in mid-November. Stocks stood at around 266,000 tonnes on November 17, up from around 217,000 tonnes at the end of October. Cancelled warrants are also high at around 92,000 tonnes in mid-November.
   

3. Polarized fund positions signal potential for market volatility in November rally
   The fund position is polarized, with 42,395 lots of longs and 32,545 lots of shorts. This means there is plenty of potential to see short-covering or long liquidation should prices either extend the November rally or the rally stalls.
   

What do our analysts say?

The lead market looks well balanced as per the supply/demand numbers, but the recent price action has been bullish. As winter approaches, the stronger prices may well prompt restocking by battery makers and short covering by funds.

William Adams, Fastmarkets

Key points

1. Zinc price forecasts rise amid bullish sentiment, but downside risks loom
   Short-term zinc price forecasts have been upgraded due to bullish sentiment and market tightness, but there are warnings of downside risks from macroeconomic turbulence and a likely correction as supply grows.
   

2. Global zinc market faces tightness outside China, while oversupply builds domestically
   The zinc market remains tight outside China. By contrast, China’s zinc market is oversupplied as smelter expansions outpace lackluster demand. Financial conditions are limiting the flow of metal exports, but it is only a matter of time before Chinese exports and smelter expansions elsewhere rebalance the market.
   

3. Zinc prices face correction ahead amid projected oversupply in 2026-27
   Rather than being outright bullish, our fair value forecast still implies room for zinc to correct lower over the short-to-medium term as the global market enters a period of notable oversupply in 2026-27.
   

What do our analysts say?

Supply tightness outside China has intensified but could rapidly dissipate as Chinese metal starts to flow out.

James Moore, Fastmarkets

Key points

1. Tin prices hold strong in October amid Indonesian mining crackdown concerns 
   Tin prices remained elevated throughout October, consolidating gains despite brief volatility early in the month following reports of a crackdown on illegal mining in Indonesia. With multiple incidents this year, any fresh shocks continue to trigger pronounced moves in both prices and near-term spreads.
   

2. Tin supply disruptions persist as Myanmar’s exports plunge 70.7% in 2025
   Tin continues to command attention as supply disruptions persist. Myanmar’s ore feed remains unreliable, with concentrate imports still far below pre-suspension levels. Cumulative shipments to China for the first nine months of 2025 are down 70.7% year-on-year and 85.8% from 2023. A full normalization of supply from Myanmar is unlikely before the end of 2025.
   

3. Muted physical tin market persists despite elevated LME prices
   Despite elevated LME prices, physical market activity remains muted. Spot demand is subdued, and premiums in Europe, Asia, and the US have stayed broadly unchanged for months. Many downstream manufacturers are adopting a dip-buying strategy, securing only essential material as needed.
   

What do our analysts say?

While the tin market remains fundamentally undersupplied due to Myanmar’s stalled recovery and regulatory headwinds in Indonesia, short-term macro factors such as tighter dollar liquidity and weaker sentiment across risk assets may lead to temporary periods of consolidation or correction. Nevertheless, unless significant new supply becomes available, tin’s uptrend is likely to continue into early 2026.

Rory Deng, Fastmarkets

Key points

1. Illusion of tightness: copper market faces reality check
   The refined copper market has felt tighter this year than the true balance between supply and demand. We are forecasting a global surplus for 2025 overall. The perception of tightness has continued to elevate pricing. But tightness is an illusion and there is the danger of a reality check for copper bulls in the next months.
   

2. Hidden surplus emerges: copper prices under pressure
   The surplus has been hidden as so much metal has been tied up off-market either in transit or in unreported inventories due to the disrupted trade flows that tariff speculation brought about. Now that refined copper is confirmed to be exempt from tariffs, more of this unreported inventory will seep into the visible domain, which should weigh on prices as it reveals the underlying oversupply dynamic. Comex stocks have already risen to 21-year highs, and more metal is reportedly set to be delivered in during September.
   

3. Supply disruptions could offer lifeline to copper bulls
   Copper bulls may be rescued by supply disruptions, because we see an increased risk of unplanned outages at both mines and smelters in the coming 6-12 months.

What do our analysts say?

LME copper has been toying with $10,000 per tonne again. There is a danger of copper failing here, as it did in July and March this year and in July and September/October last year. Previous failed sorties to this $10,000-$10,150-per-tonne resistance area have been followed by steep reversals. We should be on the lookout for this repeating, especially given the fundamental and macro risks.

Andrew Cole, Fastmarkets

Key points

1. Robust aluminium supply set to strengthen by 2026
   Global primary aluminium supply remains robust: We see no signs of disruptions from China. The supply outlook is expected to improve in 2026 with Century’s restart, which should partially offset production losses if Mozal permanently closes next March. This assumes no new power supply deal is agreed. Our latest estimates, factoring in potential additions and closure risks, show net adjusted supply reaching 73.964 million tonnes this year and potentially rising to 75.829 million tonnes in 2026.
   

2. Mixed signals shape aluminium market amid slight surplus 
   Market sentiment driven by mixed signals: Market confidence is influenced by mixed trade headlines and supportive dynamics, such as the Federal Reserve Chairman Powell’s hint at an upcoming interest rate cut in September. Persistent dollar weakness, the extension of the US-China trade truce and the implementation of President Trump’s One Big Beautiful Bill (OBBB) have provided tailwinds. Fastmarkets research forecasts total demand for primary aluminium to reach 73.574 million tonnes this year, resulting in a slight surplus of 370,000 tonnes.
   

3. Modest aluminium price growth forecast through 2026
   LME aluminium price forecast: We forecast the LME aluminium price to average $2,558 per tonne in 2025, rising modestly to $2,561 in 2026. Despite a bearish first half of 2025, this year’s price forecast is higher compared to last year when it traded at an annual average of $2,419 per tonne.
   

What do our analysts say?

With mating season upon us, key regional aluminium premiums will see increased liquidity. We are short-term bullish on the Rotterdam, cautiously bullish on the US Midwest and outright bullish on the MJP premium. On the LME aluminium price, we are closely monitoring how speculative fund managers position themselves going into year-end and watching how the current tightness in the nearby spread will affect sentiment.

Andy Farida, Fastmarkets

Key points

1. Nickel prices stagnate amid weak market fundamentals
   Weak market fundamentals are keeping the nickel price rangebound on either side of the $15,000 per tonne level. The LME nickel cash price averaged $14,909 per tonne in August, 0.8% lower than in July.
   

2. Focus shifts to major producers for nickel market rebalancing
   There have been significant production cuts outside of China and Indonesia in the past two year, but the focus is now on cuts in the two-largest producers of refined nickel to accelerate the market’s rebalancing.
   

3. Indonesia tightens grip on mining amid rising oversight
   In Indonesia, there is rising government over the industry, through mine permit issuance, rising royalties and greater environmental oversight. Moreover, there has been some civil unrest in August, although not directly mining-related.
   

What do our analysts say?

The nickel market remains in significant surplus, due to continued oversupply, a situation that has persisted since 2022, leading to falling nickel prices. With the market looking at another significant surplus this year, it is difficult to see any scope for an improvement in pricing. For prices to improve, there needs to be greater supply discipline in China and Indonesia, given the scale of production cuts outside of these two countries in recent years.

Olivier Masson, Fastmarkets

Key points

1. LME lead prices stabilize amid balanced market
   Three-month LME Lead prices recovered from weakness in early August to generally trade sideways. Prices fell to $1,956 per tonne on August 4, thereafter, trading either side of $2,000 per tonne. Sideways trading ties in with the market being in balance.
   

2. Lead market shifts from surplus to near balance
   The lead market was in a 21,000-tonne surplus in the first half of the year but looked more balanced recently, with small deficits of 1,800 tonnes in May and 500 tonnes in June.
   

3. LME lead stocks decline amid increased outflows
   LME lead stocks continued to see two-way flows, but outflow has picked up. Stocks stood at 243,125 tonnes on September 5, down from 282,950 tonnes on August 19.
   

What do our analysts say?

The lead market looks balanced from a supply, demand, and price point of view. What the market might not be prepared for is a pick-up in demand for replacement vehicle batteries that may follow the extreme high temperatures seen in Europe and China over the summer. High temperatures tend to weaken batteries, increasing the likelihood of failure.

William Adams, Fastmarkets

Key points

1. Plummeting LME stocks signal potential lead price surge
   The low and still-falling level of LME stock remains a bullish theme. LME warehouse stocks dropped by 44,325 tonnes during August and are approaching the 50,000-tonne mark in early September their lowest level since mid-November 2023. And seasonal dynamics suggest there will be further pressure on LME stocks in the short term and could help generate a test towards $2,900-$3,000 per tonne in the very short term.
   

2. Zinc market faces risks from tariffs and China’s overcapacity measures
   Risks remain however. While stable demand could underwhelm due to the front-loading effect ahead of President Trump’s reciprocal tariffs. Official efforts to reduce industrial overcapacity in China and emission restrictions over the winter months will start to be felt. At the same time we expect that the impact of tariffs will become more evident in downstream zinc-consuming sectors particularly the automotive market.
   

3. Rising zinc supplies expected amid smelter expansions and new projects
   The counter seasonal build in SHFE zinc inventories supports our view rising supplies will become more evident in the underlying fundamentals. Various mine projects continue to improve zinc concentrate availability which will continue rising with additional capacity scheduled to commence production in the coming months. While smelters outside of China are operating at reduced utilization rates, we expect smelter expansions in Norway and China will increase metal production in the coming months. Reports of a phased ramp up at the huge Huoshaoyun zinc and lead smelting project are set to provide more significant supplies during 2026.
   

What do our analysts say?

We expect supportive themes such as falling LME stocks and weak dollar to gradually fade as tariff effects and rising supplies become more evident in the underlying fundamentals.

James Moore, Fastmarkets

Key points

1. LME tin market balances fragility with supply constraints 
   LME tin spent most of August in consolidation, but a late rally of five consecutive sessions underscored the market’s fragility. Even small disruptions continue to trigger outsized moves. The balance of forces has shifted: patchy and slower-than-expected supply relief provides a floor, while macro conditions continue to cap the ceiling.
   

2. China’s tin supply tightens amid falling imports and maintenance
   China’s July tin ore imports fell 13.7% month-on-month to 10,278 tonnes, reversing earlier gains and pointing to exhausted stockpiles. Yunnan Tin’s 45-day maintenance, starting August 30, is set to further limit refined output. The resulting squeeze pushed the LME cash/three-month spread into triple digits, reaching $175 per tonne on August 29, before narrowing as some units returned to exchange warehouses.
   

3. Western governments prioritize tin as a critical mineral
   Western governments are increasingly framing tin as a critical mineral. The UK’s funding for South Crofty and new exploration in North America shows efforts to diversify supply away from Asia, but these projects remain years from contributing materially to global balances.
   

What do our analysts say?

Tin enters September with supply tightness still a key support, but macroeconomic headwinds and uneven demand limit upside. Structural deficits should keep prices supported above $34,000 per tonne, though sustained rallies beyond $35,000 will require firmer global growth and stronger end-use demand.

Rory Deng, Fastmarkets