Base Metal Fundamental Outlook
Advisory Bazaar Info Services
Copper: Copper prices experienced volatility amid geopolitical developments, US employment data, and hawkish signals from the Federal Reserve. Tight spot availability, low inventories, and scarce high-quality copper supply continue to provide support, while elevated premiums are limiting buying interest. Copper is expected to consolidate with a subdued bias today.
Aluminium: Hawkish signals from the Jackson Hole symposium and expectations of tighter global liquidity are weighing on aluminium prices. However, continued domestic destocking and expectations of stronger demand during the September peak season are providing downside support. Aluminium is expected to remain range-bound at elevated levels.
Lead: Increased arrivals of lead ingots at warehouses have pushed social inventories higher, particularly in Jiangsu and Zhejiang. Lead-acid battery companies have increased purchases following last week’s price decline, reducing smelter inventories. However, demand is expected to weaken ahead of the holiday period. Lead prices are likely to remain under pressure in the near term.
Zinc: Hawkish Fed signals, a stronger US dollar, and higher Treasury yields weighed on zinc. LME zinc surged initially before retreating sharply, while SHFE zinc recovered after LME prices stabilized. Domestic demand remains moderate, but LME movements continue to influence SHFE zinc. Zinc is expected to consolidate at higher levels during the day.
Tin: Tin lacks a clear one-way driver in the short term and is expected to remain range-bound. A more hawkish macro environment could put pressure on prices, while inventory destocking and downstream restocking may limit the downside. A range-trading strategy is preferred, with focus on macro policy signals, inventory movements, and developments in Wa State and Indonesia.
Overall Outlook: Base metals are likely to remain sensitive to global monetary policy expectations and movements in the US dollar. Supply constraints and inventory trends may provide underlying support, while a hawkish Fed stance could limit upside potential.