Base Metal Fundamental Outlook

Advisory Bazaar Info Services

🔶 Copper:

Escalating US-Iran tensions, newly imposed US tariffs, and stronger-than-expected US labor market data have strengthened the US dollar, putting pressure on copper prices. On the fundamentals, higher spot supply and a slight inventory build in Shanghai and Jiangsu have weakened support from low inventories. Meanwhile, the seasonal demand slowdown and elevated copper prices continue to suppress downstream buying. Copper is expected to trade in a subdued and range-bound manner today.

🔷 Aluminum:

Improving macro sentiment, persistent geopolitical risks in the Middle East, and continued destocking of aluminum ingots in China are providing support to prices. However, expanding production capacity outside China and weak end-user demand are limiting the upside. Aluminum is likely to remain range-bound in the near term.

⚪ Lead:

As the July contract nears expiry, downstream buyers are delaying purchases ahead of the new monthly contracts, while high temperatures are also reducing industrial activity. Mixed supply-side developments and weak consumption could lead to renewed inventory accumulation. Lead prices may remain under pressure.

🔵 Zinc:

Declining LME inventories continue to support zinc prices, but rising social inventories in China and weak downstream demand are capping gains. Geopolitical tensions may keep volatility elevated. Zinc is expected to trade within a range.

🟠 Tin:

Tin supply is gradually improving as the Wa State rainy season comes to an end, although overall production remains constrained. Indonesia’s refined tin exports continue to show a sharp year-on-year decline. On the demand side, seasonal weakness persists, while AI and semiconductor demand provide some support. Elevated prices continue to discourage aggressive buying, with downstream consumers purchasing only for immediate requirements. Tin is expected to remain range-bound with a slightly weak bias.

📌 Overall Outlook:

Amid escalating geopolitical tensions, a stronger US dollar, elevated prices, and weak seasonal demand, base metals are expected to trade in a cautious, range-bound, and slightly weaker tone today.