Base Metal Fundamental Outlook

Advisory Bazaar Info Services

Copper – Firm / Consolidation

Geopolitical tensions in the Middle East continue to escalate, while rising crude oil prices are adding to inflation concerns. The market is awaiting this week’s US CPI data for further clues on the Federal Reserve’s interest-rate outlook.

Meanwhile, expectations of additional US tariffs on copper cathode, combined with persistently low LME and SHFE inventories, are supporting expectations of tighter supply outside the US. In China, spot supply remains tight, with limited availability of some brands. However, elevated copper prices continue to weigh on downstream consumption and trading activity.

Outlook: Copper prices are expected to consolidate at firm levels today, with the underlying bias remaining positive.

Aluminium – Firm / Consolidation

Stronger-than-expected US nonfarm payrolls have increased expectations of a more hawkish Federal Reserve, creating periodic pressure on aluminium prices.

However, low aluminium ingot inventories in China and continued destocking are providing strong support to the spot market. The traditional September peak season has begun, and operating rates at processing companies are recovering, although a full recovery in end-user orders may take time. Rising aluminium billet inventories remain a potential risk, while improving supply outside China could limit the upside.

Outlook: Aluminium is expected to consolidate at firm levels in the short term.

Lead – Sideways / Mildly Positive

SHFE and LME lead recovered overnight, while LME lead inventories continued to decline. However, China’s social inventories of lead ingots are still rising, while downstream battery manufacturers remain focused on need-based purchases. Limited growth in actual demand is restricting the upside potential.

Outlook: Lead prices may stabilize after recent weakness and could see a mild recovery alongside futures. Trading is expected to remain range-bound, with focus on LME strength, spot premiums and downstream transaction activity.

Zinc – Firm / Consolidation

LME zinc extended its winning streak to four sessions overnight. Renewed geopolitical tensions, higher energy prices and rising inflation expectations have supported the metal, while concentrated fund positioning on LME is also keeping prices elevated.

In China, SHFE zinc posted a modestly bullish session. Supply remains tight, while expectations of improved demand during the September–October peak season are providing additional support.

Outlook: LME and SHFE zinc are expected to consolidate at elevated levels today, with the overall trend remaining firm.

Tin – Range-Bound

The most-active SHFE tin contract is expected to trade in the CNY 412,000–422,000/mt range today. The CNY 410,000/mt level remains an important support.

With the US CPI release scheduled for September 11 and the FOMC meeting on September 15–16, the probability of a major directional breakout remains relatively low in the near term.

Outlook: Tin is expected to remain range-bound, with intraday range trading preferred.

Overall Base Metal Outlook

Copper: Firm / Consolidation

Aluminium: Firm / Consolidation

Lead: Sideways / Mildly Positive

Zinc: Firm / Consolidation

Tin: Range-Bound