Key Moments
- Copper on the London Metal Exchange rose 0.6% to $13,087 a metric ton in official open-outcry trading.
- Aluminium and zinc touched their highest levels since April 2022 and January 2023, respectively, as the metals rally broadened.
- The cash LME copper contract traded at a $90 a ton discount to the three-month forward while the Yangshan premium slid to an 18-month low of $20 a ton.
Broad-Based Metals Rally Continues
Copper prices advanced on Wednesday, with aluminium and zinc reaching multi-year highs, as the U.S. dollar weakened to a four-year low and investors increased bullish exposure to industrial metals.
Benchmark three-month copper on the London Metal Exchange (LME) was up 0.6% at $13,087 a metric ton in official open-outcry trading. Aluminium gained 1.7% to $3,261, marking its strongest level since April 2022, while zinc rose 1.2% to $3,392 after earlier hitting its highest point since January 2023.
Dollar Weakness Supports Commodities
The dollar index fell to its lowest level since February 2022 on Tuesday after U.S. President Donald Trump said the value of the U.S. currency was “great”. A softer dollar typically enhances the appeal of commodities priced in dollars by making them cheaper for buyers using other currencies, which can underpin demand.
Macro Positioning Drives Base Metals
Analysts at brokerage Sucden Financial said during a webinar on Wednesday that the strength in base metals prices was being propelled primarily by broader macro positioning rather than underlying physical market fundamentals.
The firm noted that speculative flows were spilling over from precious metals into base metals. “What we’ve been seeing with the specs (speculative investors) in gold and silver, they’re all piling into the base metals, too,” Sucden’s Robert Montefusco said.
Copper Market Structure and Chinese Flows
The structure of the LME copper market pointed to limited urgency for near-term supply. The cash LME copper contract was trading at a $90 a ton discount to the three-month forward contract, indicating weak nearby tightness.
At the same time, the Yangshan premium – a key gauge of demand for copper imports into China, the world’s largest metals consumer – dropped to an 18-month low of $20 a ton, signaling subdued import appetite.
Sucden’s head of research, Daria Efanova, said Chinese producers were selling copper onto the LME to reduce risk ahead of the Lunar New Year holiday in February, a period when liquidity is expected to be thin and market volatility could increase.
Aluminium Boosted by Upgraded Price Outlook
Aluminium’s advance followed a revised price outlook from Goldman Sachs. The bank lifted its first-half average aluminium price forecast to $3,150 a ton from $2,575, citing low inventory levels, uncertainty over power availability for new smelting capacity in Indonesia, and firm global demand growth from electric vehicle manufacturers and power grid projects.
Performance Across Key LME Contracts
Other base metals also moved higher alongside copper, aluminium, and zinc.
| Metal | Price (per metric ton) | Move | Notable Context |
|---|---|---|---|
| Copper (3-month LME) | $13,087 | +0.6% | Cash contract at $90 discount to 3-month; Yangshan premium at $20 |
| Aluminium | $3,261 | +1.7% | Highest since April 2022; forecast upgrade from Goldman Sachs |
| Zinc | $3,392 | +1.2% | Highest since January 2023 |
| Lead | $2,022 | +0.1% | Modest gains alongside broader complex |
| Nickel | $18,400 | +1.3% | Participating in the wider base metals rally |
| Tin | $56,250 | +2.5% | Touched a record $58,340 on Tuesday |
Tin climbed 2.5% to $56,250 a ton after hitting a record $58,340 on Tuesday. Nickel was up 1.3% at $18,400 a ton, and lead edged 0.1% higher to $2,022 a ton, reinforcing the broad-based strength across the LME base metals complex.
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