Base Metal Fundamental Outlook

Advisory Bazaar Info Services

🔶 Copper

* Uncertainty over US refined copper tariffs has eased concerns about tight supply outside the US, putting pressure on copper prices.

* Domestic and imported supply arrivals have increased in the short term, making the supply balance slightly looser.

* High prices are weighing on downstream buying, with market participants adopting a strong wait-and-watch approach.

* As of September 10, SMM copper inventories across major Chinese regions fell 1,400 MT WoW to 87,500 MT.

* Outlook: Copper is expected to consolidate within a narrow range with a subdued bias today.

🔶 Aluminium

* A stronger US dollar and rising expectations of higher US interest rates are weighing on aluminium prices in the short term.

* Low Chinese aluminium inventories and continued destocking are providing strong downside support.

* September seasonal demand is showing signs of improvement, although the strength of end-user orders remains to be confirmed.

* Rising billet inventories and the resumption of overseas production could add to supply pressure over the longer term.

* Outlook: Aluminium is likely to remain under pressure in the short term, while lower levels may find relatively strong support over the medium to long term.

🔶 Lead

* LME lead faced resistance after several sessions of gains, with profit-taking weakening the rebound momentum.

* SHFE lead initially rose during the night session but retreated under pressure from LME weakness, while holding above CNY 16,000/MT.

* Spot market demand remains weak, with downstream buyers largely purchasing as needed and some shifting toward lower-priced secondary lead.

* Outlook: Lead prices are expected to stabilize at elevated levels and trade sideways, with limited upside and downside potential.

🔶 Zinc

* Stronger-than-expected US PPI data and a firmer US dollar have increased expectations of a Fed rate hike next week.

* LME zinc recorded a sharp decline, while weakness in LME zinc dragged SHFE zinc lower.

* However, tight supply conditions continue to provide downside support.

* Outlook: LME and SHFE zinc are expected to consolidate today.

🔶 Tin

* LME tin inventories stood at 5,155 MT, while SHFE inventories were 5,573 MT.

* Logistics disruptions in Myanmar’s Wa State continue to constrain tin concentrate supply.

* Myanmar’s July tin concentrate imports fell 27% MoM to 1,077 MT, while Indonesia’s August exports recovered to 4,564 MT.

* July solder operating rates stood at 72.8%, remaining weak compared with the same period over the past five years.

* Outlook: Expectations of a weaker-than-anticipated September peak season are limiting the upside potential for tin.