Base Metal Fundamental Outlook

Advisory Bazaar Info Services

Copper Outlook

Copper prices are expected to remain firm today, supported by improving global macro sentiment. Optimism over a potential US-Iran agreement and the possible reopening of the Strait of Hormuz has eased crude oil prices and reduced expectations of multiple US Federal Reserve rate hikes this year, providing support to base metals.

However, geopolitical risks remain elevated as attacks on cargo vessels continue in the Red Sea and the Strait of Hormuz. On the fundamentals side, supply tightness has eased with higher arrivals of both domestic and imported copper cathodes. Meanwhile, demand remains subdued due to the seasonal off-season and elevated prices, with downstream consumers purchasing only to meet immediate requirements. Overall, copper is likely to trade with a positive bias while remaining range-bound.

Aluminum Outlook

Aluminum prices continue to receive support from improving macroeconomic sentiment and rising liquid aluminum production in China. The easing of interest rate concerns has also strengthened market sentiment.

Nevertheless, increasing aluminum production capacity outside China, weak domestic demand during the seasonal off-season, and ongoing geopolitical uncertainty in the Middle East are expected to limit further gains. Aluminum is therefore likely to consolidate with a firm undertone.

Lead Outlook

Lead prices are finding support from stable demand in Southeast Asia and widening spot premiums despite persistent geopolitical uncertainties. In China, improved inquiry activity from downstream consumers and expectations of maintenance-related production cuts at several smelters have strengthened market sentiment.

As a result, lead prices have stabilized after recent declines and are expected to remain supported in the near term.

Zinc Outlook

Zinc prices remain supported by declining LME inventories and improving global sentiment following expectations of the reopening of the Strait of Hormuz. Increased bullish positioning has further strengthened the market.

However, weak domestic consumption during the seasonal off-season is likely to cap gains in SHFE zinc. Market participants will closely monitor China’s zinc ingot export performance for further direction.

Tin Outlook

Tin fundamentals remain constructive as global supply disruptions continue. Production at China’s Yinman Mine remains suspended, while mining activity in Myanmar’s Wa State continues to recover slowly. Additional supply risks persist in the Democratic Republic of Congo and Peru, keeping the global tin market tight.

Although Indonesia is expected to increase exports in August, it is unlikely to fully offset the supply deficit. On the demand side, seasonal weakness continues, but consumption from electric vehicles, AI infrastructure, and inventory building ahead of new Apple and Huawei smartphone launches is expected to provide incremental support. Consequently, tin prices are expected to remain firm in the near term.

Market View

Base metal prices are expected to remain supported by improving macroeconomic conditions and persistent supply-side concerns. Copper, zinc, and tin are likely to outperform, while aluminum and lead are expected to trade with a positive but range-bound bias.