Fastmarkets monthly base metals market update

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

Key points

1. US excludes refined copper from tariffs, shocking market
   The copper market was taken by surprise – after building hundreds of thousands of tonnes of inventory in the US over the past few months in anticipation of Donald Trump’s proposed tariff on copper imports, the US President announced on July 30, just two days before its scheduled August 1 implementation, that refined copper would actually be excluded from Section 232 tariffs.
   

2. Copper prices plunge as US faces inventory glut
   Not surprisingly, the CME price collapsed almost instantly. The record-high CME-LME arbitrage, which had been an unprecedented windfall for traders able to relocate metal to the US, evaporated just as quickly. The US is now awash with excess copper inventory that will likely be destocked in the coming weeks and months once regional price differentials open up to incentivize the reversal of recent trade flows and facilitate the redistribution of the US glut to other regions.
   

3. Tight copper supply forces smelters to cut production
   Meanwhile, the copper raw materials markets remain excruciatingly tight, forcing smelters to reduce production where possible, especially those reliant on concentrate.

What do our analysts say?

Donald Trump’s surprise tariff exemption for refined copper has reset copper market dynamics and sentiment. LME copper may now face short-term headwinds from resurgent inventories, reversed trade flows, damaged sentiment and fund repositioning.

Andrew Cole, Fastmarkets

Key points

1. LME aluminium rally stalls amid dollar strength and stock build-up
   After two positive monthly closes in May and June, the LME aluminium price has started to show signs of bullish exhaustion in July. The rebound in the dollar index from the July low of 96.37 to the psychological 100.00 level acted as a headwind for the bulls. In addition, the steady build up of LME aluminium stock levels due to the healthy dose of daily inflow has clipped bullish sentiment.
   

2. Seasonal trends and rising stocks weigh on aluminium prices in August 
   When it comes to price performance based on 20 years of seasonal data, August is a challenging period for aluminium, with an overall performance of minus 0.5%. Taking into account the seasonal summer lull, the rebound in the dollar index, and the steady build up in LME inventory levels, these dynamics could well put a bearish spin on LME aluminium price.
   

3. Rising aluminium long positions face liquidation risk amid price pressures
   LME aluminium’s net long fund exposure continues to grow, with the latest data registering a ninth consecutive week of more buying than selling interest. At 79,225 lots, the strong increase in long exposure on the light metal should bode well for its price action. However, the pace of the significant buildup in aluminium speculative net long exposure is now at risk of liquidation if the price of the light metal comes under downward pressure in the short term.
   

What do our analysts say?

Going into August, there are more bearish catalysts than bullish ones. As such, the LME aluminium price is exposed to further selling pressure as long as the July high at $2,664.50 per tonne is not breached. For the bulls, there is a key horizontal support zone around the $2,500 to $2,555 per tonne level where they can make a stand to defend it. Finding dip-buying interest at the horizontal support zone could potentially keep sellers at bay.

Andy Farida, Fastmarkets

Key points

1. LME nickel prices dip 1.5% in July, extending downward trend
   Despite a feeble mid-month rally, the LME nickel cash price ended July down by 1.5% at $14,080 per tonne. This prolongs the multi-year trend of declining prices.
   

2. Nickel price spikes in July driven by market sentiment, not fundamentals
   There were some bouts of rising prices during July. These rises were due more to temporary increases in risk appetite or greater macroeconomic optimism than to any nickel-related fundamentals.
   

3. Indonesian smelter cutbacks hint at improved nickel supply discipline
   There were reports of some cutbacks at small nickel pig iron smelters in Indonesia. Since the nickel market’s underlying issue is overproduction due to a surge in Indonesian capacity, any indication that the country’s producers are beginning to take a more disciplined approach to supply could be seen as a mild positive for the market.
   

What do our analysts say?

The nickel market’s fundamental issue is one of oversupply, with the market having been in surplus since 2022. As a result, the LME nickel cash price has been on a downtrend for several years. With the nickel market looking at another significant surplus this year, there will have to be far more supply cutbacks to return the market to a semblance of balance. It is hard to see how this will happen without Indonesia-based producers taking a greater part of this supply discipline.

Olivier Masson, Fastmarkets

Key points

1. LME lead prices slide in July amid stronger dollar
   Three-month LME Lead prices traded lower in July after early July strength at $2,073 per tonne failed to challenge the March high around $2,100 per tonne. Prices ended July with a low at $1,963. A rebound in the US dollar that saw the Dollar Index climb back to the 100 level from early July’s low at 96.37 was a headwind.
   

2. LME lead faces pressure as warehouse stocks rise
   Another headwind was the inflow into LME warehouses that showed the market was not tight, with 48,725 tonnes being delivered during the month, although the steady daily outflow also continued.
   

3. Polarized fund positions emerge as lead prices weaken
   In line with weaker prices, the fund shorts have been more active again, increasing their gross position to 30,586 lots by August 1 from 19,700 lots on July 4. The fund longs have been less busy, holding 29,609 lots on August 1, little changed from 29,974 lots on July 4. The fund position is now polarised again.
   

What do our analysts say?

Lead’s failure to push forward with the April to early July gains suggests a lack of bullish sentiment, something the fund position highlights too, as does the overall upward trend in LME stocks. Overall, the market is looking balanced but well supplied – therefore we would expect more range-trading.

William Adams, Fastmarkets

Key points

1. Low stocks and supportive trends propel zinc towards $2,900
   LME zinc stocks are below 100,000 tonnes amid persistent outflows. A weak dollar, positive seasonality and the current technical configuration remain supportive themes for zinc prices and could help generate a test towards $2,900 per tonne in the very short term.
   

2. Tariff uncertainty and automotive sector risks loom over zinc market
   Risks remain, however. Most significant are ongoing uncertainties regarding tariffs between the US and China, with the current 90-day pause set to end on August 12. At the same time, we expect the impact of tariffs to become more evident in downstream zinc-consuming sectors, particularly the automotive market.
   

3. Rising zinc supplies and smelter expansions signal increased production ahead
   We expect rising supplies to 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. Support from the Australian government now reduces the risk of smelter capacity closures in the country. And 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.
   

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. Tin market shifts focus from supply disruptions to macro trends
   Tin’s price dynamics shifted from being supply-disruption-driven to macro-driven in mid-2025. Earlier fears of a supply shock have eased – for example, the long-awaited restart of Myanmar’s Wa State tin mine caused only a brief dip in prices as the market had largely “priced in” that supply news ahead of time.
   

2. Tin supply tightens amid caps, quotas and bottlenecks
   Tin availability remained constrained in July. Myanmar’s restart is limited under a 10,000-tonne cap with logistical delays, Indonesia’s smelters are approaching quota ceilings, and upstream bottlenecks continue to cap China’s refined output despite higher ore imports.
   

3. Rising tech and NEV sales boost tin demand
   Semiconductor sales rose 22.5% YoY in May, and China’s NEV sales showed 30.1% growth in June. As technologies scale, tin’s role in advanced electronics and green infrastructure will become increasingly critical.
   

What do our analysts say?

Tin is entering August in a state of macro-sensitive equilibrium. Structural supply fragility remains but investors are now weighing global supply growth concerns more heavily. While structural supply fragility remains—highlighted by persistent tight exchange inventories—any improvement in macro data could reignite bullish momentum. For now, caution prevails due to macro uncertainty but the bullish long-term thesis is intact.

Rory Deng, Fastmarkets