Fastmarkets monthly base metals market update

Key points

1. Rising inventories signal a copper market reality check
   Copper’s near-term fundamentals appear weak, particularly with exchange inventories rising sharply this year to multi-decade highs, which is at odds with near-record high prices. This suggests prices may be somewhat out of sync with the physical market and are overdue for a reality check.
   

2. High copper prices test consumer patience amid bullish demand outlook 
   While this divergence can persist given the strong, bullish long-term demand narrative around AI datacenters and electrification that has been attracting investment and speculative flows into the copper futures market, the elevated price could encourage consumers to resort to destocking if they perceive copper as overpriced.
   

3. Shifting investor sentiment and geopolitical risks cloud copper’s outlook
   Fund positioning also shows some moderation in bullish sentiment, with investors taking profits on long positions and gradually building short positions. Meanwhile, the escalating Middle East conflict adds another layer of uncertainty to copper’s outlook, given spiking energy prices and the risk of higher inflation, but also the potential for fresh supply chain disruptions.

What do our analysts say?

Following the correction from late January’s all-time high, copper prices consolidated in a lower sideways band throughout February. This range-bound trading reflected a balance between profit-taking by speculative investors, dip-buying interest, and uncertainty due to elevated macroeconomic and geopolitical risks. The market is still looking for fresh direction and will likely be volatile and reactive to news flow in the coming weeks.

Andrew Cole, Fastmarkets

Key points

1. Middle East tensions drive aluminium prices and premiums higher
   Given the current geopolitical tensions in the Middle East, both LME aluminum prices and regional premiums are being repriced higher. In Europe, premiums now face a double hit: historically low domestic inventories and a renewed wave of supply uncertainty. Higher freight and logistical costs are set to push replacement costs up, adding further upward pressure on the premium. Going forward, two broad scenarios stand out.
   

2. Escalation in GCC could propel aluminium prices to annual highs 
   A prolonged conflict — Any escalation that disrupts smelter operations in the GCC is likely to push both LME prices and regional premiums to new annual highs. Supply risk would remain the dominant driver.
   

3. Ceasefire could ease aluminium market, but recovery hinges on infrastructure
   A shorter conflict with a ceasefire — This may offer temporary relief, but much will depend on how the market assesses damage to ports, infrastructure, and logistics, and how quickly operations can return to normal.
   

What do our analysts say?

Events in the Middle East remain highly tense, leaving LME aluminum prices at the mercy of incoming headlines. Investor sentiment toward risk assets has weakened, extending even to traditional safe-haven markets such as gold and silver. Instead, it is the US dollar that has taken center stage, with the dollar index attempting to break above the key psychological level of 100. The prospect of persistently high oil prices and ongoing regional tensions could encourage investors to sell into rallies—even within the base-metals complex.

Andy Farida, Fastmarkets

Key points

1. Nickel prices dip in February but stay above 2025 averages
   The nickel cash price fell in February, with the average LME cash price being 4% lower than in January. However, the price remains well above its 2025 trading range of $14,000–$16,000 per tonne.
   

2. Indonesia’s mining quotas aim to rebalance nickel market
   The Indonesian government is seeking to impose greater supply discipline on its massive nickel industry through greater control of ore mining quotas. This could rebalance the market more quickly than expected.
   

3. Nickel quota revisions could shift market dynamics
   Even if the government imposes tighter quotas, there is always the possibility of these being revised as the year progresses.
   

What do our analysts say?

The nickel market is in a state of structural oversupply due to the growth in Indonesian production. If prices are to remain in their current trading range, there need to be concrete signs that Indonesia will indeed impose greater discipline on the industry. The market still awaits the publication of the definitive annual quotas, however.

Olivier Masson, Fastmarkets

Key points

1. Lead prices hit new lows, testing key support levels
   Lead prices are on the ropes. They breached support at $1,937 per tonne on March 3, falling to $1,927 per tonne, a level they had not seen since the Liberation Day sell-off in April last year when prices reached $1,837.50 per tonne.
   

2. Polarized fund positions keep lead prices in limbo
   Interestingly, the funds trading LME lead are net short, while they are net long for all other base metals, which seems odd. But with the fund position polarised (51,890 lots short and 41,645 lots long), we wait to see whether the shorts take profits, which could see prices bounce, or whether the out-of-the-money longs cut their losses and thereby add to the price weakness.
   

3. Seasonal shift and rising stocks weigh on lead prices
   As winter turns to spring in the northern hemisphere, the risk of a cold spell that kills off lead-acid batteries and boosts demand for replacement vehicle batteries is diminishing, so lead may well see further price weakness, especially with exchange stocks on the rise.
   

What do our analysts say?

While the bottom of the range tends to lead to a rebound in lead prices, the market is looking heavy, with repeated tests of support levels in recent months and with exchange stocks rising. With a large, polarised fund position, there is potential for increased price volatility if prices break lower or start to rebound.

William Adams, Fastmarkets

Key points

1. Refined zinc market faces oversupply amid weak demand
   Rising supply and subdued end-use demand, especially in China, suggest a transitional year to oversupply for the refined zinc market.
   

2. Middle East conflict escalates costs in global zinc market 
   The conflict in the Middle East has introduced several risks to the global zinc market. Freight and insurance costs have increased. Additionally, the jump in oil and gas prices will drive costs for mining and, particularly, smelters, with those in Europe being the most sensitive.
   

3. Rebuilding may spur zinc demand, but short-term risks loom
   Given the level of destruction, this could result in a strong demand boost once rebuilding gets underway. But that is still some way off, with short-term risks skewed to the downside given the potential for disruptions to HDG and downstream operations in the region, as well as risks of an inflation shock for energy-importing economies.
   

What do our analysts say?

While still modeling the refined zinc market transitioning to oversupply, the conflict in the Middle East has introduced several risks to this outlook.

James Moore, Fastmarkets

Key points

1. Tin prices spike on supply fears, but market remains cautious
   LME three-month tin prices briefly surged to $58,900 per tonne in early March before retreating sharply. This spike was driven by supply concerns linked to Northern Myanmar’s armed conflict and Indonesian export uncertainty. The sharp rejection of prices above $59,000 highlights growing caution in the market.
   

2. Myanmar’s tin mines eye restart amid rising cost pressures
   According to the International Tin Association (ITA), authorities in Myanmar’s Wa mining region have introduced a cost-sharing mechanism to fund the dewatering of flooded mine shafts at Man Maw, signalling progress towards restarting deeper, higher-grade tin operations. However, the move also raises cost burdens for operators, with total charges estimated at around 35% when combined with the existing 30% tax-in-kind.
   

3. Profit-taking and long liquidation pressure tin market
   Funds have taken profits from the rally. The net long fund position had dropped to 2,070 lots by February 27, down from December’s peak of 5,144 lots. There is still potential for more long liquidation, with 2,360 lots of longs still outstanding.
   

What do our analysts say?

Tin prices are likely to remain volatile in the near term as the market balances supply risks with improving visibility on potential production recovery. While developments in Myanmar suggest progress towards restarting higher-grade operations, the higher cost burden on operators indicates that any supply recovery is likely to be gradual.

Rory Deng, Fastmarkets

Key points

1. Copper prices soar to record $14,527, consolidate in February
   Copper’s record-breaking rally extended in January, reaching a series of all-time highs that peaked at $14,527.50 per tonne on January 29. This was in line with our warnings of a high-case scenario potentially running up to $15,000 per tonne. Prices have consolidated lower in February so far, in the $12,000 to $13,000 per tonne range – still extremely elevated levels.
   

2. Speculative frenzy drives copper rally beyond fundamentals 
   While the copper market became increasingly bullish since late September, when prices broke back above $10,000 per tonne on fundamental grounds, the accelerated rally since early December seems excessive. It appears to have been fueled by a speculative frenzy, particularly out of China, and broader concerns about dollar debasement, which have also propelled precious metals to record highs.
   

3. Copper’s bullish momentum fueled by supply risks and demand growth
   For speculators and investors, copper still has some bullish narratives around supply disruption risks, regional tightness, and upbeat demand perceptions from electrification, data centers, military spending, onshoring, and stockpiling.

What do our analysts say?

We believe copper prices have run ahead of themselves now, but that does not mean we can say we have seen the highs yet. The risks remain to the upside in the first half of the year, while the technical uptrend remains intact and speculative exuberance is alive. However, risks shift to the downside around mid-year, when we would expect consolidation at lower levels, towards $10,000 per tonne.

Andrew Cole, Fastmarkets

Key points

1. China’s capacity cap and geopolitical tensions boost aluminium prices
   China’s hard cap on primary aluminium capacity at 45 million tonnes remains a key bullish anchor for the market, reinforcing the strong price action seen in recent weeks. Geopolitical tensions between the US and Iran have added a fresh layer of uncertainty, raising questions over potential disruptions to aluminium supply chains.
   

2. Supply shifts tighten aluminium market as Mozal shuts down 
   Meanwhile, supply-side developments continue to reshape the outlook. South32 has confirmed that Mozal will be placed under care and maintenance from March 2026, tightening the balance further. At the same time, Century’s Nordural smelter is expected to resume normal operations later in Q4 this year, partially offsetting the loss but not enough to ease immediate supply concerns.
   

3. Global aluminium deficit forecasted at 360,000 tonnes for 2026
   We forecast a 360,000-tonne global deficit in the primary aluminium market this year. This shortfall is driven by strong demand from non-traditional sectors – green energy, AI data centers, and high-tech manufacturing – alongside sustained, albeit slower, growth in automotive and construction.
   

What do our analysts say?

Aluminium’s strong start to 2026 has quickly faded, with the retreat from the recent high of $3,341 per tonne signalling a tentative short-term top and prompting heavier selling. Even so, the market has so far avoided a monthly close below the psychologically important $3,000-per-tonne level, keeping a window open for the next bull wave.

Andy Farida, Fastmarkets

Key points

1. Nickel prices surge to new $16,750-$18,750 trading range
   The nickel cash price has shifted to a new trading range of around $16,750-$18,750 per tonne, up from around $14,000-$16,000 per tonne through 2025.
   

2. Indonesian supply controls drive nickel market rebalance expectations
   This increase in the trading range is due to expectations that the Indonesian government will seek to impose greater supply discipline on its nickel industry. This would involve tighter control of ore mining quotas and could potentially rebalance the market more quickly than anticipated.
   

3. Nickel market awaits 2026 mining quota amid demand uncertainty
   The market is still awaiting the final total nickel mining quota for 2026. However, even after the final value is released, we expect some degree of flexibility to respond to market demands.
   

What do our analysts say?

The nickel market has been oversupplied since 2022, mainly due to the growth in Indonesian production. A sustained rise in prices will require concrete evidence of Indonesian supply discipline. While Indonesia appears more serious about controlling supply, the market is still waiting for the definitive ore quota level for the year.

Olivier Masson, Fastmarkets

Key points

1. Lead prices struggle below $2,100 amid high inventories
   Three-month LME lead prices lagged the broader base-metals rally in January, with the cash price repeatedly capped below $2,100/t. Despite early strength, the metal underperformed its peers as persistent overhead resistance and sizeable exchange inventories kept sentiment subdued.
   

2. E-bike demand supports lead market amid EV-driven challenges
   A combination of shifting LME/SHFE price differentials and China’s strong e-bike replacement program is offering pockets of support. However, broader fundamentals remain balanced: vehicle production is expected to contract slightly in 2026, while rising EV penetration continues to erode long-term lead-acid battery demand, which seems to be weighing on sentiment. Treatment charges remain deeply negative and under pressure, reflecting concentrate shortages, but strong acid and precious metals prices are helping smelters cope.
   

3. Polarized fund positions signal volatility in lead market
   Funds remain highly polarized, with gross long positions close to historical highs, even as the net position is comparatively small. This imbalance leaves room for sharp moves in either direction, though the greater capacity for funds to add short exposure suggests slight downside asymmetry if prices break lower.
   

What do our analysts say?

So far, cold weather in parts of North America and Europe has not prompted battery manufacturers to restock, so the balanced supply and demand situation in lead continues. Technically, the market is looking vulnerable again.

William Adams, Fastmarkets

Key points

1. Zinc rallies strongly but faces resistance above $3,500
   LME zinc appears to have woken from a relative slumber, closing January with its strongest monthly increase since April 2024. Broader bullish sentiment and ample scope for catch-up gains remain supportive themes, but with investors already leveraged on the long side without positive fundamental developments, the market has rejected a test above $3,500 per tonne.
   

2. Zinc market surpluses persist amid stable output 
   Our fundamental outlook for annual surpluses remains unchanged. Despite supply risks from mine disruptions and geopolitical tensions, projected output remains stable.
   

3. Steady zinc demand in 2026 fuels surplus forecast
   The demand outlook for zinc in 2026 remains solid but unspectacular, contributing to a forecast surplus that will increase into 2027.
   

What do our analysts say?

Positive price drivers remain for the momentum, but we maintain that prices risk correcting towards mid-2026.

James Moore, Fastmarkets

Key points

1. Tin prices surge 45.4% in speculative January rally
   Tin prices rallied strongly in January as a speculative rally caught consumers off guard. Many had been operating hand-to-mouth, expecting supply to improve as 2026 progressed. The rally peaked at $58,860 (LME three-month prices), up 45.4% from 2025’s closing level.
   

2. Price inelastic tin demand drives hand-to-mouth consumer strategy
   While demand for tin is fairly price inelastic due to its use across a wide range of products, consumers have responded to the high prices by continuing to operate on a hand-to-mouth basis. This approach has left them vulnerable to price volatility.
   

3. Tin rally sees profit-taking as long positions decline
   Funds have taken profits during the rally. The net long fund position dropped to 2,239 lots by February 6, down from December’s peak of 5,144 lots. There is still potential for further long liquidation, with 2,440 lots of longs still outstanding.
   

What do our analysts say?

We thought tin prices were on borrowed time when they moved above $50,000 per tonne, as exports of tin ores and concentrates have started to pick up from Myanmar. As these are processed into refined metal, the tightness in the tin market is expected to ease further, along with prices.

William Adams, Fastmarkets

Key points

1. Copper prices soar to record $13,270/t in early 2026
   Copper prices entered 2026 on a powerful upward trajectory, breaking multiple records throughout December and in early January. The official LME copper cash price hit an all-time high of $13,270 per tonne in early January.
   

2. Production disruptions and resource secruity drive optimistic outlook
   Fundamentals around production disruptions, potential further Section 232 supply distortions, electrification/AI demand acceleration, and, increasingly, government policies targeting resource security, underpin an optimistic narrative.
   

3. Short-term risks loom amid demand destruction and market volatility
   But risks abound from shorter-term indicators, including overbought technical signals, geopolitical shocks, tariff uncertainties, weak manufacturing activity data globally, and stretched equity markets. We will see more demand destruction, thrifting, substitution, and destocking by price-sensitive industrial users this year.

What do our analysts say?

Our base-case copper price forecast scenario reflects a balanced market but also considers the abundant risks. It has been revised higher to an average of $10,943 per tonne in 2026, up from $10,634 per tonne previously. Given the risks, however, it is prudent to prepare for alternative potential scenarios, with room for daily pricing to experience both significant rallies that could challenge $15,000 per tonne at the bullish extreme, and sharp corrections that may test the first major support levels in the $10,000-11,000 per tonne range.

Andrew Cole, Fastmarkets

Key points

1. Aluminium prices surge past $3,000/t, poised for further gains in 2026
   LME aluminium closed 2025 with an impressive 18.5% gain, entering the new trading year firmly above $3,000 per tonne. Fastmarkets forecasts the light metal to advance further given the current macroeconomic backdrop and expectations of a market deficit in 2026. The light metal price is likely to rise towards $3,200 per tonne in the first half of the year.
   

2. Geopolitical risks could disrupt aluminium supply via Strait of Hormuz 
   While there is no immediate supply threat, geopolitical risks remain a key upside factor. Renewed tensions and the potential for US military intervention in Iran could put the Strait of Hormuz back in the spotlight. Any disruption to this critical shipping route—particularly if Iranian forces attempt to block it—would impact the flow of primary aluminium from the Middle East, potentially triggering a sharp price surge.
   

3. EU CBAM costs to boost Rotterdam aluminium premiums in 2026
   Fastmarkets forecasts the Rotterdam P1020 aluminium premium to strengthen in January 2026. Carbon costs continue to underpin European premiums. Fastmarkets will reflect additional EU Carbon Border Adjustment Mechanism (CBAM) costs in its benchmark duty-paid aluminium P1020A, billet, and primary foundry alloy (PFA) premiums effective January 1, 2026, when the definitive period of CBAM begins.
   

What do our analysts say?

Aluminium enters 2026 on a strong footing, supported by last year’s gains and a forecasted market deficit that could propel prices higher in the first half of the year. While fundamentals remain constructive, geopolitical flashpoints – particularly any disruption to the Strait of Hormuz – pose significant upside risks. At the same time, European premiums are set to strengthen, underpinned by rising carbon costs and the definitive implementation of CBAM, adding further complexity to pricing dynamics.

Andy Farida, Fastmarkets

Key points

1. Nickel prices surge amid uncertainty over Indonesia’s mining quotas
   The nickel cash price rallied aggressively towards the end of December due to the risk that Indonesia – the world’s top producer – could limit nickel ore mining quotas in 2026, even though quotas have yet to be announced.
   

2. Supply risks propel nickel prices to $16,500/t despite oversupply
   Although the market remains in a state of structural oversupply, the risk that the Indonesian government could take a stronger stance and enforce greater supply discipline was enough to push the nickel price higher towards the end of the month. For the first three weeks of December, the price remained below the $15,000 per tonne level, as it had been in November. However, in the last week of December, supply risk pushed the price higher, ending the month close to $16,500 per tonne.
   

3. Uncertainty over 2026 quotas halts PT Vale Indonesia’s mining operations
   There has not been any announcement regarding the final quotas for 2026. In fact, in the absence of such quotas, PT Vale Indonesia has halted mining activity. Only once these quotas are announced will the market have a clear view of possible supply levels.
   

What do our analysts say?

The nickel market has been in a structural surplus since 2022, due to an oversupply of – mostly Indonesian – material. If the recent run-up in prices is to be sustained, then Indonesia needs to show supply discipline. However, the market still awaits the announcement of final 2024 quota levels.

Olivier Masson, Fastmarkets

Key points

1. LME lead prices end year volatile but balanced
   Three-month LME lead prices had a volatile end to the year. Prices broke lower out of the long-held (May to November) sideways range in December after a short-lived break higher in November. But by year-end, prices were back in the range, highlighting that the market remains well-balanced overall.
   

2. Lead market faces tight concentrates despite supply surplus
   The International Lead and Zinc Study Group data supports this view, putting the market in a 20,000-tonne supply surplus in the first ten months of 2025, after a 70,000-tonne surplus across the whole of 2024. The concentrate market remains tight; the Fastmarkets’ spot treatment charge for low-silver, cif China concentrates, was assessed at minus $165 per tonne in December, the weakest it had been all year. It was minus $60 at the end of June and minus $15 in December 2024. The reason for the negative TC is that mine supply has been growing at a slower pace than primary refined supply.
   

3. Polarized LME lead positions signal potential for price volatility
   The funds trading LME lead remain polarized with 41,555 lots of longs and 42,194 lots of shorts. Short-covering or long liquidation could add to volatility if prices become more directional again.
   

What do our analysts say?

Lead continues to look balanced in terms of supply and demand, but with prices range-bound, they are being left behind by the other base metals that all put in strong performances in December. This raises the question of whether lead will play catch-up.

William Adams, Fastmarkets

Key points

1. AI investment and global agendas drive bullish market sentiment
   Positive price drivers remain for the moment as the AI investment surge has amplified the bullish narrative created by the decarbonization agenda, decoupling supply chains, increased military spending, and the potential demand boost from rebuilding Gaza and potentially Ukraine.
   

2. Market vulnerable to correction amid priced-in bullish themes 
   The scale of price gains suggests bullish themes have already been priced in, while the volatile macroeconomic and geopolitical landscape risks a broader correction in financial markets in the coming months.
   

3. Smelter bottlenecks pose short-term risk amid growing mine supply
   Pressure on smelters risks creating a bottleneck for concentrate supplies in the short term. But with mine supplies increasing and smelter expansions in China feeding through, we maintain that supply growth will create fundamental price weakness.
   

What do our analysts say?

Positive price drivers remain for the momentum, but we maintain prices risk correcting towards mid-2026.

James Moore, Fastmarkets

Key points

1. Tin market tightens amid Myanmar import rebound and geopolitical risks
   November Chinese customs data showed a sharp rebound in tin ore imports from Myanmar, aligning with the end of the rainy season and improved weather across Wa State. This points to a partial resumption of mining activity, though operational stability remains uncertain. Meanwhile, geopolitical risks in key producing countries like the DRC and Nigeria continue to add background uncertainty. With no major new supply expected, the market remains structurally tight.
   

2. Semiconductor boom bolsters tin demand despite weak tinplate segment
   Traditional segments like tinplate remain soft, but global semiconductor sales rose 21.2% in the first ten months of 2025, according to the Semiconductor Industry Association. This growth is driven by AI, electrification, and data infrastructure, strengthening tin’s strategic demand base.
   

3. Liquidity and dovish signals sustain momentum amid volatility risks
   Ample global financial liquidity and dovish macroeconomic signals continue to support risk appetite. While near-term momentum remains intact, stretched technical indicators and gradually improving supply visibility could introduce bouts of volatility. Markets may become increasingly reactive to incremental data.
   

What do our analysts say?

Tin enters 2026 in a fragile balance. Partial supply recovery meets persistent structural tightness. With financial liquidity abundant and positioning increasingly momentum-driven, we expect heightened price sensitivity and sharp two-way moves to define early 2026.

Rory Deng, Fastmarkets

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