Base Metal Fundamental Outlook
Advisory Bazaar Info Services
Copper Outlook
Copper prices remain supported by supply-side concerns after the DRC announced a ban on copper and cobalt concentrate exports. However, stronger-than-expected US labour market data and rising expectations of a possible Federal Reserve rate hike in September have capped gains. Geopolitical uncertainty surrounding the Strait of Hormuz also remains a key risk factor.
On the fundamentals, improved arrivals of domestic and imported copper cathodes have eased supply conditions, while elevated prices and seasonal weakness continue to weigh on downstream demand. China’s SMM copper inventories increased by 7,300 tonnes week-on-week to 119,200 tonnes as of August 6. Copper is expected to consolidate at elevated levels in the near term.
Aluminium Outlook
Aluminium fundamentals remain supportive, driven by continued inventory drawdowns and a persistent supply deficit. Although the US Federal Reserve maintained a hawkish stance and geopolitical uncertainty in the Middle East continues, the market remains fundamentally firm.
Aluminium prices are likely to trade with a positive bias in the short term, while investors will closely monitor production resumptions in the Middle East and the commissioning of new capacity.
Lead Outlook
Lead prices recovered after touching their lowest levels in more than three years earlier this week. Smelters reduced spot sales at lower prices, tightening market supply and leading to a decline in social inventories. However, the approaching SHFE contract delivery may increase warehouse stocks, limiting further upside.
Lead prices are expected to remain range-bound, with market participants focusing on smelter maintenance and inventory trends during the second half of August.
Zinc Outlook
Zinc continues to receive strong support from declining LME inventories, firm cash premiums, and persistent tightness in zinc concentrate supply. The reopening of the export window for zinc ingots has also improved market sentiment.
Zinc prices are expected to remain firm, although upcoming US Non-Farm Payroll (NFP) data could influence short-term price direction.
Nickel Outlook
Nickel remains sensitive to expectations of tighter US monetary policy, as several Federal Reserve officials continue to express concerns over persistent inflation. At the same time, uncertainty surrounding developments in the Strait of Hormuz continues to add volatility to the market.
Nickel is expected to trade in a volatile but broadly range-bound pattern in the near term.
Tin Outlook
Tin fundamentals remain supported by uncertainty over the duration of the Yinman Mining suspension, which continues to create concerns over future supply. Smelter operating rates remain below normal levels, while demand from the solder and alloy sectors is still weak.
Although demand from AI servers and advanced packaging is expected to improve over the year, spot buying at higher prices remains limited. Tin prices are likely to stay supported by supply uncertainty despite subdued near-term demand.