Base Metal Fundamental Update

Advisory Bazaar Info Services

🔸 Copper

On the macro front, trading remained sluggish due to the Thanksgiving holiday. Market focus stays on next week’s US economic data and the probability of a December rate cut. Additionally, Putin’s statement that the final version of the peace agreement is still undecided has revived risk-off sentiment.

On the fundamentals side, both imported and domestic arrivals declined, while rising prices dampened buying interest.

Overall, copper prices are expected to find support today.

🔸 Aluminum

Macro sentiment remains broadly positive domestically and internationally. Dovish remarks from US Fed officials and rising expectations of interest rate cuts have boosted market confidence. Foreign institutions also expect China’s economy to maintain steady growth next year under policy support.

Fundamentally, earlier price-driven pressure on consumption has delayed some demand. This week, operating rates of major aluminum processing enterprises rose 0.3% WoW to 62.3%, with improvements seen across extrusion, wire & cable, and primary/secondary alloy segments.

Currently, aluminum prices are being driven largely by macro sentiment, while progress on production cuts at the Icelandic smelter remains a key international factor.

In the short term, aluminum prices are expected to fluctuate at elevated levels.

🔸 Lead

Production cuts and shutdowns at secondary lead enterprises in regions like Anhui and Jiangsu due to certificate renewal continue to affect supply. Maintenance at northern China’s secondary smelters has also not yet concluded.

With declining lead prices and lower smelter profits, some enterprises have suspended shipments, offering premiums of 0–80 yuan/mt over SMM #1 lead prices. Downstream users are preferring primary lead, while primary lead smelters are also undergoing maintenance, causing regional tightness in lead ingot supply.

Entering December, maintenance at primary smelters is increasing. If prices drop further, secondary lead production may decline more sharply than expected.

Tight supply and expectations of persistently low social inventory continue to strongly support lead prices.

🔸 Zinc

Overnight, LME zinc closed with a bearish candlestick, though supported by the 5-day moving average. As macro sentiment gradually stabilized and LME zinc inventory rose above 50,000 mt, the increasing inventory pressured prices.

SHFE zinc also formed a bearish candle, suppressed by the 10-day moving average, and opened lower due to weakness in LME prices.

However, the zinc ingot export window remains open, and zinc concentrate TCs continue to decline, providing underlying support for SHFE zinc.

In the short term, SHFE zinc is likely to maintain a range-bound, volatile movement.

🔸 Tin

Supply: Tin ore supply remains tight in major producing regions such as Yunnan, while most smelters are expected to maintain stable production in November.

Demand: Orders have declined significantly due to weak demand in consumer electronics and home appliances. High prices are further suppressing actual consumption.

New emerging sectors: AI computing and PV installations have contributed some additional demand, but the impact is still small and insufficient to offset the decline in traditional sectors.

Overall, limited demand recovery and tight ore supply may keep tin prices under pressure.